The People's Bank of China, the China Securities Regulatory Commission and the State Administration of Foreign Exchange jointly issued an announcement to further support overseas institutional investors in conducting bond repo transactions in China’s interbank bond market. The move extends repo access to all foreign institutional investors, whether entering via direct market access or through Bond Connect, and shifts foreign-investor repos to an international market approach that transfers the collateral bond and allows it to be reused. Eligible participants include foreign central banks or monetary authorities, international financial organisations and sovereign wealth funds, as well as foreign banks, insurers, securities firms, fund managers and other asset managers, plus long-term investors such as pension, charitable and endowment funds. The framework also permits overseas financial market infrastructures, self-regulatory organisations and industry associations to provide services subject to Chinese laws and financial administration rules, with overseas self-regulatory organisations and industry associations required to file the standard version of their master agreement with the People's Bank of China. Risk controls include closed-loop funds management across trading, custody, settlement and FX processes, plus enhanced look-through supervision using trade, custody and data reporting. For repos executed via Bond Connect, transactions will initially follow the existing cash bond trading mechanism and be conducted with market makers selected from public market primary dealers with strong Bond Connect market-making performance, with the National Interbank Funding Center to publish the list; limits on market makers’ funding provision will follow the unified framework for cross-border RMB interbank financing, while foreign investors’ repo balances will be managed by reference to the interbank outright repo leverage ratio rules, with implementing details to be issued by interbank market infrastructures. Foreign investors already conducting interbank bond repos can continue using the original operational model during a 12-month transition period starting from the announcement’s implementation date. Settlement of repo-related cash flows must follow the existing funds and account management rules for the investor’s underlying cash bond access channel, as set out in the cited cross-border bond investment funds management rules and related joint central bank, securities regulator and FX authority notices.
Central Bank of the Republic of China 2025-09-26
People's Bank of China, China Securities Regulatory Commission and State Administration of Foreign Exchange open interbank bond repos to all foreign investors under title transfer model
The People's Bank of China, China Securities Regulatory Commission, and State Administration of Foreign Exchange announced expanded access for overseas institutional investors to conduct bond repo transactions in China's interbank bond market. This initiative allows all foreign institutional investors, including central banks and asset managers, to engage in repos via direct market access or Bond Connect, adopting an international market approach for collateral reuse. The framework includes risk controls and requires compliance with Chinese laws, with a 12-month transition period for existing participants.