Central banks approve clearing agencies for bond connect
Regulators say that the bond connect scheme will start with northbound trading, allowing foreigners to invest in the mainland bond market
The central banks in the mainland and Hong Kong have approved the clearing agencies in both markets to work with the Hong Kong Exchanges and Clearing on the rules for the bond connect scheme, according to a joint announcement by the People’s Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA) on Tuesday. The announcement did not include a launch date.
The bond connect would start with northbound trading that will allow international investors to trade in the China Interbank Bond Market, the statement said.
The southbound trading for mainlanders to trade in Hong Kong bonds would come at a later stage.
The formal launch of Bond Connect will be separately announced, the statement said.
Premier Li Keqiang said in March that the bond connect would take place this year, and the Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia said last week that technical details of the scheme would be announced in the next few weeks. Some brokers have speculated that the launch date would be announced by July 1 to mark the 20th anniversary of the handover of Hong Kong.
“Bond Connect will be formally launched after relevant rules and system development have been finalised, market participants’ practical needs have been suitably addressed, relevant regulatory approvals have been granted and all other necessary preparations have been completed,” the statement said.