China Central Depository & Clearing Co., Ltd. (CCDC) released Thursday its bond service guide on the China (Shanghai) Pilot Free Trade Zone, reported www.cnstock.com.
CCDC, an important bond trading settlement platform for China's interbank bond market, aimed to gradually create a safe and highly-efficient FTZ bond service system and attract foreign institutional investors to invest in the bond market in China.
The debut of the document came after demand for Renminbi-denominated bonds by international institutions kept increasing after the Chinese currently was put into IMF's Special Drawing Rights (SDR) currency basket, effective from October 2016.
So far, some of China's local governments, banks, and trust management firms are actively preparing for bond issuance or related business in the Shanghai FTZ. They plans to float, in accordance with the file, local government bonds, asset-backed securities, and green bonds.
As the document says, CCDC will provide such services as bond issuance, registration, depository, settlement, interests and principal payment, valuation, and information disclosure to better serve relevant parties.
Compared with CCDC's interbank bond-related services, its service rules for the Shanghai FTZ show that qualified domestic and foreign institutions can apply for opening bond accounts and the FTZ dedicated sub-accounts in CCDC.
According to CCDC, the qualified institutions include domestic institutions that have set up an approved FTZ Separate Accounting Unit, domestic or overseas institutions with a Free Trade Account (FTA), overseas institutions with a Non-Resident Account (NRA), and other qualified overseas institutions.
Overseas institutions mentioned above refer to QFIIs, RQFIIs, clearing banks for RMB business in Hong Kong and Macao, cross-border RMB settlement participating banks and foreign central banks or monetary policy authorities, and other qualified overseas financial institutions as well as products issued thereof.
Meanwhile, financial institutions or enterprises in China, or the Shanghai FTZ and foreign financial institutions and companies are all allowed to finance via bond issuance in the FTZ.
For investors, they can trade bonds via relevant electronic platform of the Shanghai FTZ and buy bonds in the over-the-counter market of the FTZ.
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