CFETS, BCCL launch interbank bond subscription biz for overseas investors

Participants attend a ceremony held by Hong Kong Exchanges and Clearing Limited to launch the "northbound" mainland-Hong Kong bond connect in Hong Kong, south China, July 3, 2017.

China Foreign Exchange Trade System (CFETS) and Bond Connect Co., Ltd. (BCCL) started from July 4 interbank bond subscription business for overseas investors, according to an announcement released by CFETS on July 1.

The business, open at the same time to underwriters in China, provides overseas investors with a safer and more efficient channel to invest in the primary market of China's interbank bond market.

Through connectivity between the CFETS bond issuance, underwriting and distribution system and ePrime, a system to provide overseas bond bookkeeping, issuance and other services of BCCL, overseas investors are supported to participate online in interbank bond issuance.

For domestic underwriters and overseas investors, they can use electronic bond distribution confirmation forms to replace signing of offline agreements, which largely improves the efficiency of overseas investors' investment in China's interbank bond market.

Besides, BCCL will trim its service fees from July 11.  For transaction targets with term to maturity shorter than or equal to one year, BCCL will adjust down the service charges from the past 0.0020 percent of aggregate face value to 0.0015 percent of total par value.

For trading targets with term to maturity longer than one year, BCCL service fees will be slashed from 0.0040 percent of total face value to 0.0030 percent of aggregate face value.

BCCL is a joint venture established between CFETS and Hong Kong Exchanges and Clearing Limited (HKEX). 

In future, CFETS, a major global trading platform and pricing center for Renminbi (RMB) and related products, will continue to propel product and service innovation to better serve overseas institutions in their investment into China's interbank bond market.