Singapore Exchange (SGX), Asia’s largest international bond marketplace, has signed a Memorandum of Understanding (MOU) with China Central Depository & Clearing Co (CCDC), a central securities depository for Chinese government bonds, in a wide-ranging agreement to strengthen and promote Singapore and China’s bond markets. This is CCDC’s first comprehensive MOU of strategic cooperation with an international exchange, that covers the full lifecycle from issuance to settlement and custody.
The MOU was announced at the 2nd Singapore-Shanghai Comprehensive Cooperation Council (SSCCC) meeting, co-chaired by Singapore’s Minister for Education and Second Minister for Finance Lawrence Wong and Shanghai Mayor Gong Zheng.
Under the MOU, SGX will work with CCDC to promote the internationalisation of China’s bond market, and provide Chinese bond products and services internationally. Other initiatives include enhancing cross-border connectivity to facilitate mutual investor access in Singapore and China, jointly developing the bond market in the Shanghai Free Trade Zone (FTZ) as well as researching bond products such as smart beta indices and developing exchange-traded funds (ETFs) linked to CCDC’s ChinaBond indices.
Lee Beng Hong, Senior Managing Director, Head of Fixed Income, Currencies and Commodities at SGX, said, “We are excited to extend our collaboration with CCDC to further internationalise China’s bond markets and promote its increasing role in global capital markets. We are honoured to be the first exchange outside of China to disseminate CCDC’s ChinaBond-ICBC RMB Bond Index suite since last year. This expanded partnership will allow us to further bridge investor access to a key financial infrastructure in China and the main gateway to the country’s bond market. We look forward to working with CCDC to strengthen the cross-border connectivity and bond ecosystems in China and Singapore, further deepening the strong bilateral cooperation between both countries.”
Xu Liangdui, Vice President of CCDC and President of CCDC Shanghai Headquarters, said, “This mutually beneficial partnership will facilitate deeper participation by foreign investors in China’s bond market and advance the development of the Chinese domestic bonds market. As China continues to open up its financial markets and promote the internationalisation of the RMB, this MOU will lay the foundation for the next step of our cross-border partnership. This comprehensive cooperation between CCDC and SGX is a new highlight in the 30 years of diplomatic relations between China and Singapore and an impetus for greater collaboration between our financial markets.”
In November, SGX welcomed the listing of NikkoAM-ICBCSG China Bond ETF, which is the maiden ETF linked to the ChinaBond-ICBC RMB Bond Index suite. Separately, SGX also saw the listing of six China Development Bank’s domestic bonds earlier this month, marking the first time China onshore RMB bonds were listed on the exchange.
