Clearstream partners with Citi to increase Chinese bond trades
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Clearstream partners with Citi to increase Chinese bond trades 30 October 2017London Reporter: Jenna Lomax
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Clearstream has announced a new partnership with Citi, offering international market participants access to China’s fixed-income market via its new cross-border trading programme, Bond Connect.
Bond Connect is a mutual access scheme that allows institutional investors from mainland China and overseas to trade in each other’s bond markets, through a connection between China and Hong Kong’s financial hubs.
The first phase of the scheme, allowing for northbound trading, went live on 3 July, after Citi announced it had been selected as an official Bond Connect trading dealer by the People’s Bank of China.
Starting from 20 November, Bond Connect will extend the China Interbank Bond Market (CIBM) to Clearstream clients throughout the rest of the world, via Hong Kong.
The new service adds to direct access to the China onshore bond market available via Clearstream’s China Bond Link.
However, Bond Connect also offers overseas investors an international central securities depository custody and connectivity infrastructure, which includes corporate action processing and reporting.
Cindy Chen, head of securities services at Citi Hong Kong, commented: “As the leading global bank on Bond Connect, Citi is pleased to partner with Clearstream to provide further ease of access to global investors and financial institutions to access the local China bond market.”
Philip Brown, co-CEO of Clearstream Banking, said: “China Bond Connect represents a major breakthrough in the opening of the Chinese capital markets, contributing to the growing international recognition of the important global role that the CIBM has assumed over the past years.”
Clearstream has also confirmed it will continue to offer stable custody services to its UK-based clients no matter how the Brexit negotiations evolve.
The Deutsche Boerse subsidiary outlined its existential incentive in maintaining and nurturing its existing strong and proven relationships with London-based firms in its monthly transaction data report for September.
Despite the uncertainty that came after the referendum results last year, Clearstream said its main objective through Brexit was to minimise risk of cross-border settlement.
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