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State Administration of Foreign Exchange enters the way to facilitate foreign institutional investors to invest in the inter-bank bond market

Time:2019-10-22 Click:765

According to the official WeChat news of the People's Bank of China, in order to thoroughly implement the decision-making arrangements of the Party Central Committee and the State Council on expanding the opening up to the outside world and forming a new pattern of comprehensive opening up, the People's Bank of China and the Foreign Exchange Bureau have steadily promoted the orderly opening of the inter-bank bond market. At present, foreign institutional investors can invest in China's inter-bank bond market through qualified foreign institutional investors (QFII), RMB qualified foreign institutional investors (RQFII), direct market entry, and bond exchange.

In order to facilitate the investment of overseas institutions and to reflect the high level of openness requirements, the People's Bank of China and the foreign exchange bureau have formulated the “Notice on the Relevant Issues of Investing in the Inter-bank Bond Market for Foreign Institutional Investors”, allowing the same overseas QFII/ RQFII and bonds directly under the market channel are transferred to non-transactions, and the funds accounts can be transferred directly. At the same time, the same foreign entities can only enter the market through the above channels. Recently, with the approval of the State Council, the People's Bank of China and the Foreign Exchange Bureau have cancelled the RQFII pilot countries and regions, as well as the QFII/RQFII quota limit. The policy of investing in the inter-bank market by different institutional investors in different channels is basically the same.

The above-mentioned reform measures have further improved the convenience of foreign institutional investors' investment in the market, helped to increase the breadth and depth of China's financial market opening, and promoted the internationalization of the RMB. In the next step, the People's Bank of China and the State Administration of Foreign Exchange will continue to study and introduce new optimization management measures in accordance with the requirements of the Party Central Committee and the State Council to achieve a high level of openness in the financial market.

The full text of the notice is as follows:

People's Bank of China, State Administration of Foreign Exchange

About Into the step to facilitate foreign institutional investors

Investment in the interbank bond market

Notice of related matters

According to the "Regulations of the People's Republic of China on Foreign Exchange Control" and the "People's Bank of China Announcement" ([2013] No. 8) and other relevant regulations, the relevant matters concerning the convenience of foreign institutional investors investing in the domestic inter-bank bond market are as follows:

壹, peer overseas institutional investors can be based on their own investment management needs, under the Qualified Foreign Institutional Investor (QFII) or RMB Qualified Foreign Institutional Investor (RQFII) (hereinafter collectively referred to as QFII/RQFII) bond accounts and interbank The inter-bank market bonds held in the bond accounts under the direct investment of the bond market (hereinafter referred to as direct investment) are transferred in two-way non-transactions.

(壹) Foreign institutional investors shall submit to the China Government Securities Depository Trust & Clearing Co., Ltd. or the Interbank Market Clearing House Co., Ltd. (hereinafter collectively referred to as the bond registration and settlement institution) through the QFII/RQFII domestic custodian bank or direct investment settlement agent. Non-transactional transfer application for holding interbank bond market bonds.

The application materials to be submitted for non-transaction transfer and the specific operational procedures to be followed shall be subject to the business guidelines issued by the bond registration and custody institution.

(II) After the non-transaction of the QFII/RQFII and the direct investment channel is completed, the follow-up transaction and the fund remittance shall follow the relevant management requirements of the follow-up channel.

(3) The bond registration and custody institution shall report the non-transaction status to the People's Bank of China on a regular basis.

2. The funds in the QFII/RQFII escrow account of the same overseas institutional investors and the funds in the direct investment fund account can be directly transferred in the territory.

(壹) Foreign institutional investors shall submit an application for transfer of funds from the QFII/RQFII escrow account to their direct investment fund account to the QFII/RQFII domestic custodian bank; or propose to the direct investment settlement agent the funds in the direct investment fund account. Transfer to the application for its QFII/RQFII escrow account.

(2) After the transfer of funds between QFII/RQFII and direct investment channels is completed, follow-up transactions and fund remittances shall follow the relevant management requirements of subsequent channels.

3. The domestic custodian bank and settlement agent shall, in accordance with their own duties, do a good job in non-transactional transfer and fund transfer related services, data reporting and monitoring of overseas institutional investors' bonds in accordance with the provisions of this Notice.

The domestic custodian bank and settlement agent shall follow the “Measures for the Administration of the RMB Cross-border Collection and Payment Information Management System” (Suifa [2017] No. 126), and the Office of the People's Bank of China on improving the inter-bank cross-border collection and payment information management system. The Notice of Business Data Reporting Process (Yin Ban Fa [2017] No. 118) and other relevant regulations, and the transfer information of overseas institutional investors to the RMB cross-border payment and payment information management system.

4. Investors from overseas institutions investing in the domestic inter-bank bond market through QFII/RQFII and direct investment channels respectively, only need to report to the Shanghai Headquarters of the People's Bank of China through the QFII/RQFII domestic custodian or direct investment settlement agent.

5. The non-transaction of bonds and the transfer of funds within the QFII/RQFII and direct investment channels by overseas central banks, international financial organizations and sovereign wealth funds shall be implemented with reference to this Notice.

6. If an overseas institutional investor opens an account in the name of the product under management, it shall be an illegal human product.

7. This notice shall come into force on November 15, 2019. In the event that the current relevant regulations are inconsistent with this notice, this notice shall prevail.

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