The China Securities Regulatory Commission, jointly with the People’s Bank of China and the State Administration of Foreign Exchange, issued rules to further support overseas institutional investors in conducting bond repurchase (repo) transactions in China’s bond market, covering both pledged repos and outright repos and aiming to facilitate foreign investors’ liquidity management. Eligible overseas institutional investors include foreign central banks or monetary authorities, international financial organisations and sovereign wealth funds, as well as a wide range of financial institutions incorporated outside China and other long-term institutional investors such as pension, charitable and endowment funds. Foreign investors must comply with Chinese laws and relevant financial management requirements, including channel-specific funds and account rules, and additional domestic investment and FX management requirements where repos are conducted under the Qualified Foreign Investor and Renminbi Qualified Foreign Institutional Investor channels. Domestic financial market infrastructures must update and file operational rules with relevant regulators and provide trading, custody, settlement and clearing services with ongoing monitoring and incident reporting, while overseas infrastructures and self-regulatory bodies providing services must comply with Chinese requirements and accept supervision. The framework also requires the use of a repo master agreement, with standard versions to be filed with the regulators, and sets out coordinated supervision among the three authorities, including the People’s Bank of China’s macroprudential role and the State Administration of Foreign Exchange’s FX transaction oversight, with sanctions for breaches. The measures take effect upon issuance and simultaneously repeal the 2015 People’s Bank of China notice on repo trading in the interbank bond market by offshore RMB clearing banks and offshore participating banks.
China Securities Regulatory Commission 2025-09-26
China Securities Regulatory Commission and peers expand foreign institutional investors’ access to bond repo in China’s bond market
The China Securities Regulatory Commission, with the People’s Bank of China and the State Administration of Foreign Exchange, has issued new rules to support overseas institutional investors in bond repurchase transactions in China's bond market. The framework includes compliance with Chinese laws, updated operational rules for domestic infrastructures, and coordinated supervision among the three authorities. These measures, effective immediately, replace the 2015 notice on repo trading by offshore RMB clearing and participating banks.