The China Foreign Exchange Trade System (CFETS) and the Hong Kong Exchanges and Clearing Limited (HKEX) on Tuesday said they will oversee provision of investor admission and trading services for a bond market connect between Hong Kong and the Chinese mainland, as they both are the major operating entities of the Bond Connect.
The statement was issued soon after the People's Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA) jointly announced plans to establish a mutual market access scheme to connect the mainland and Hong Kong bond markets, a scheme widely known as the Bond Connect.
The launch date remains subject to further notice.
Through the bridging of related mainland and Hong Kong financial infrastructure institutions, investors in one market will be able to trade bonds in the other market, said the CFETS and the HKEX in the statement.
The Bond Connect represents another significant breakthrough in the opening of the mainland bond market and an important step in closer interaction and cooperation between the mainland and Hong Kong, which will further strengthen Hong Kong's position as an international financial center, the statement said.
In alignment with the current opening-up policy framework of the China Interbank Bond Market (CIBM), the Bond Connect will provide a convenient market access conduit to improve client admission efficiency, it said.
The CFETS and the HKEX will continue to work closely under the guidance of the PBOC and the HKMA and together with the market entities and custodian and settlement institutions in both markets to prepare for the launch of the Bond Connect, it said.
Before the Bond Connect, two stock links between Hong Kong and the Chinese mainland have been introduced, including the Shanghai-Hong Kong Stock Connect launched in Nov. 2014, and the Shenzhen-Hong Kong Stock Connect launched in Dec. 2016.
