The People's Bank of China Announces A New Channel for Investment "Go Abroad"! Bond Connect’s "Southbound Trading" …
The People's Bank of China Announces A New Channel for Investment "Go Abroad"! Bond Connect’s "Southbound Trading" Will be Officially Launched on September 24
The initial phase of the "Southbound trading" will start with spot trading, with a total annual quota of 500 billion yuan equivalent and a daily quota of 20 billion yuan. The Foreign Exchange Centre released the trading rules for the "Southbound trading" at the same time, specifying that the "Southbound trading" will be traded by request for quotation and the trading service hours will be the trading hours of the mainland interbank bond market. Shanghai Clearing House issued implementation rules and business guidelines, specifying that it will open nominal holder accounts with the Hong Kong Monetary Authority to hold the bonds purchased on behalf of domestic investors.
Who are the institutions participating in the "Southbound trading" at this stage? According to the announcement, the mainland investors are tentatively the 41 banking financial institutions (excluding non-banking financial institutions and rural financial institutions) in the People's Bank of China's 2020 open market business primary dealers. Qualified Domestic institutional investor(QDII) and RMB Qualified Domestic institutional investor(RQDII) can also conduct overseas bond investment through the Southbound trading. The relevant funds can only be used for bond investment and are managed in a closed-loop manner.
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