From the Newspaper News on July 4, 2022, the China Foreign Exchange Trade System (hereinafter referred to as the "Exchange") will cooperate with Bond Connect to launch the cross-border subscription business of inter-bank bonds for foreign investors and domestic underwriters.
In terms of reducing investment costs, in order to reduce investment costs for foreign investors, Bond Connect, a joint venture between CFETS and the Hong Kong Stock Exchange, will reduce the service fee on July 11. If the remaining term of the transaction target is less than or equal to one year, the service fee will be reduced by 0.0020% of the total face value is reduced to 0.0015%; if the remaining term of the transaction target is greater than one year, the service fee is reduced from 0.0040% of the total face value to 0.0030%.The fee reduction is 25%.
In order to promote the high-quality opening of China's bond market and optimize the investment environment for overseas institutions, under the unified deployment of the People's Bank of China, the Exchange has deepened the reform of opening-up service supply from different dimensions such as improving investment convenience, optimizing service content, and reducing investment costs. Responsible for financial infrastructure, promote the coordinated development of the mainland and Hong Kong financial markets, and continue to launch innovative and convenient service measures for overseas institutions.
Based on the interconnection between the CFETS bond issuance and distribution system and the new debt trading system (ePrime), which provides comprehensive services for overseas bond bookkeeping and issuance, the cross-border subscription business supports overseas investors to participate in inter-bank bond issuance online, and domestic underwriters and overseas institutions can Use the electronic distribution confirmation form to replace the offline distribution agreement, solve the problem of difficulty in signing the distribution agreement offline by overseas institutions, realize the online electronicization of the entire process of cross-border bond underwriting and distribution business, improve the efficiency of overseas institutions investing in the domestic bond market, and further promote the The bond primary and secondary markets are linked to serve the construction of a high-level financial market opening pattern.
At the same time, in order to support the inclusion of Chinese government bonds in international bond indices and better meet the trading needs of foreign passive investors, the CFETS has continued to optimize related transactions and supporting services after launching the closing price trading mechanism in November last year. The transaction order update time of the transaction was advanced to about 17:30, and the closing price trading mechanism was extended to the international payment model in August.The closing price trading mechanism supports foreign institutional investors to conduct transactions with domestic quotations during the day based on the plus or minus point of CFETS closing valuation yield. , to help overseas institutions to better carry out index tracking investment.
In addition, after filing with the CFETS, foreign investors can choose multiple banks to handle capital exchange and foreign exchange risk hedging business to achieve multi-party price comparison; support foreign investors to enter inter-bank foreign exchange through the prime brokerage business model, agency model, and transaction split account Market, improve the initiative and convenience of its exchange rate risk management; launch the bond connect foreign exchange risk management information service, Hong Kong settlement bank can query the data required for transaction review and monitoring based on the authorization of bond connect investors, and facilitate the authenticity management of foreign exchange transactions; In the near future, it is planned to further extend the trading hours of the inter-bank foreign exchange market to provide a more convenient market environment for foreign investors.
In terms of optimizing service content, on the one hand, it will improve the convenience of overseas institutions to enter the market.CFETS actively implements the requirements of the "Notice of the General Office of the People's Bank of China on Further Optimizing the Infrastructure Opening Services of the Interbank Bond Market and Strengthening Management During and After the Event", and continues to improve the convenience and efficiency of foreign institutions entering the market.According to the filing requirements of overseas asset management entities, support overseas asset management institutions to choose their own account opening methods; simplify account opening procedures and improve account opening efficiency. The account opening application form has been reduced to one, and the content of the information change form has been simplified by more than 60%, basically accomplishing one job. Complete account opening within days; continue to coordinate and optimize the information exchange mechanism with relevant parties such as overseas investors, CMU, third-party platforms and bond connect companies, and further simplify the handling procedures of overseas institutions; support foreign investors to file for foreign exchange transaction settlement banks through bond connect companies Information; overseas banking groups may designate a branch within the group to centrally handle RMB purchase and sale business.
On the other hand, the Chinese and English versions of the "China Bond Market Investment Handbook" (2022) were released.Under the guidance of the People's Bank of China, the CFETS, together with the Association of Dealers, Shanghai Clearing House, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, HSBC, Orient Securities, CITIC Securities and other institutions, jointly revised the "China Bond Market Investment Manual" (2022 ).The handbook introduces in detail the bond market organizational structure, investment varieties, trading mechanisms, as well as opening-up policies and business processes, etc., and according to the reform and development of the bond market and the expansion and deepening of opening-up in recent years, further details on the market entry process, innovation mechanism, latest Policies and measures have been introduced in detail.The Chinese and English versions of the Bond Market Investment Handbook (2022) will be released before July 4.(Liu Qi)
(Editor in charge: Jiang Ninglu)
