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China issues rules on overseas investment in mainland interbank bond market

Updated: Jun 23,2017 9:04 AM     Xinhua

BEIJING — China’s central bank has issued rules on overseas investment in the mainland interbank bond market via the mainland-Hong Kong bond connect program.

Qualified overseas investors can buy bonds in the interbank bond market either with Chinese yuan or foreign currencies, according to the rules released by the People’s Bank of China (PBOC), which took effect on June 21.

Those qualified investors include foreign central banks, sovereign wealth funds, international financial organizations, Qualified Foreign Institutional Investors (QFII), RMB Qualified Foreign Institutional Investors (RQFII), and financial agencies including commercial banks, insurance companies, securities brokerage houses, and fund management companies, the PBOC said in a separate statement on June 22.

China approved a bond connect program between the mainland and Hong Kong earlier last month, allowing investors from both sides to trade bonds on each other’s interbank markets.

Overseas investors should register the bonds they purchase under qualified overseas trusteeship bodies, which have accounts in mainland counterparts.

They can invest in bonds that are tradable on the mainland interbank bond market, including Treasury bonds, local-government bonds, policy bank bonds, commercial bank bonds, corporate bonds, and asset-backed securities, among others, the PBOC said.

The PBOC and other regulatory bodies have the right to access the data of overseas investors investing in the mainland interbank bond market, according to the rules.

The PBOC will supervise the process and work with the Hong Kong Monetary Authority and regulators in other countries and regions to protect investor interests and counter money laundering, according to the rules.