A cross-border delivery-versus-payment (DvP) link between Hong Kong’s US dollar real time gross settlement (RTGS) system and Malaysia’s Ringgit RTGS system has been built on 29 October, according to the Hong Kong Monetary Authority. The new link builds on the success of the payment-versus-payment (PvP) link between the two sides that was established in November 2006.

The DvP link will help eliminate settlement risk of US dollar bonds issued and traded in Malaysia by ensuring simultaneous delivery of US dollars in Hong Kong and US dollar bonds in Malaysia. The DvP settlement services provide the necessary settlement infrastructure to support potential issuance of US dollar bonds in Malaysia, as part of the initiatives to promote Malaysia as an Islamic financial centre and Hong Kong as an international financial centre.

Similar to the PvP link, the DvP link is operated in Malaysia by Bank Negara Malaysia and in Hong Kong by Hong Kong Interbank Clearing Limited, which operates the interbank clearing systems in Hong Kong, and is jointly and equally owned by the HKMA and the Hong Kong Association of Banks. (HKMA)