HKEX welcomes Bloomberg LP to become the second trading platform to operate within the Bond Connect infrastructure. The move will allow even more investors from around the world to access Bond Connect, a mutual bond access programme between Hong Kong and Mainland China.

HKEX Chief Executive Charles Li said: “We are very pleased to welcome Bloomberg and its terminals to Bond Connect, our innovative link to the Mainland bond market.  Allowing institutional investors to access the Mainland’s interbank bond market through Bloomberg terminals and Bond Connect will further boost international participation, contributing to the growing relevance of the nation’s bond market.”

 “We look forward to working with regulators in the Mainland and Hong Kong, as well as our partners in the trading and financial infrastructure space, to further optimise Bond Connect,” Li said.

The launch of Bond Connect in July 2017 was another significant breakthrough in the opening of the Mainland bond market, as well as an important step in closer interaction and cooperation between the Mainland and Hong Kong.

The addition of a new international trading platform was among several measures announced in July by the People’s Bank of China to support the sustainable development of the Bond Connect programme.

Following Bond Connect’s introduction, a number of improvements have been made to further enhance the scheme. Delivery versus Payment (DVP), which eliminates settlement risk, was rolled out alongside the automation of block trade processing. Taxation policies were also clarified, with corporate income tax and the value added tax both waived for the first three years. 

Market participation in Bond Connect has been growing steadily, with average daily volumes reaching RMB3.60 billion in the first 10 months of the year. In addition, the number of registered overseas institutional investors participating in Bond Connect has also continued to increase. As of the end of October, there were 450 approved international institutional investors in Bond Connect, up from 247 at the end of 2017.

Bond Connect is operated by the Bond Connect Company Limited (BCCL). BCCL is a joint venture established by China Foreign Exchange Trade System and HKEX to support Bond Connect-related trading services.

Bond Connect is an innovative scheme that effectively connects the Mainland bond market with international practices, at lower access costs and higher market efficiency. 

The innovations under Bond Connect are in the market admission in pre-trade, price discovery and information communication in trading and custody and settlement arrangements in post-trade. HKEX’s Chief China Economist’s Office published a research report earlier to look at the innovations and implications of Bond Connect.

Click here for the full report.