Clifford Chance

Clifford Chance Newsflash-The Bond Connect – Another Effort of Market Liberalisation through Hong Kong

11 July 2017

Key issues

Overview of the Bond Connect
Trading link
Settlement Link
Pending issues and outlook

The launch of the northbound trading link of the Bond Connect (Northbound Trading Link) was announced on 2 July 2017, right following the 20th anniversary of the return of Hong Kong's sovereignty to the PRC.  Trading officially commenced on 3 July 2017, with participation by 70 international investors and 19 onshore quoting institutions and a turnover of over RMB7 billion by the close of the day.

The Mainland and Hong Kong first launched the Stock Connect in 2014, initially establishing mutual market access between Shanghai and Hong Kong, and subsequently between Shenzhen and Hong Kong as well.  The latest introduction of the Bond Connect represents yet another significant milestone in connecting the two financial markets a step further. Since Hong Kong is a free and open market, like the Stock Connect, the Bond Connect is essentially a connection between China and the world through Hong Kong.

Since 16 May 2017 when the People's Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA) jointly announced their collaboration in setting up the Bond Connect, a series of regulations and guidelines[1]  have been issued to formulate the basic framework and key rules for implementing the Northbound Trading Link.

 

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