Shanghai Clearing House, an interbank clearing house in China, said on Monday that it had obtained approval from China's central bank to provide custodian and clearing services for cross-border interbank certificates of deposit (CDs) issued inside Shanghai's free trade zone (FTZ).
Last Friday, the People's Bank of China, the central bank, published detailed measures allowing deposit-taking financial institutions to sell CDs tradable in the interbank market to financial institutions, overseas or domestic, in Shanghai's FTZ based on free trade accounts. Free trade accounts, launched last June in Shanghai's FTZ, allow funds in the accounts to move freely between the FTZ and offshore.
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