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To put into practice the arrangements set forth in the Announcement by the People's Bank of China, China Securities Regulatory Commission and State Administration of Foreign Exchange [2022] No. 4 (Matters on Further Facilitating Overseas Institutional Investors to Invest in China's Bond Market), further facilitate overseas institutional investors to participate in bond trading and lift the opening level of Shenzhen bond market, on 29 June 2022, Shenzhen Stock Exchange (“SZSE”) and China Securities Depository and Clearing Corporation Limited (“CSDC”) jointly published the Implementation Rules of Shenzhen Stock Exchange and China Securities Depository and Clearing Corporation Limited for Bond Trading, Registration and Settlement Business for Overseas Institutional Investors, laying down specific arrangements for overseas institutional investors with approved access to the interbank bond market to participate in the bond market of Shenzhen.
The Implementation Rules set out provisions for the account opening, trading, settlement and information submission by overseas institutional investors. Main contents are as follows: First, carrying out market-entering arrangements. Overseas institutional investors with approved access to the interbank bond market may apply to CSDC for the opening of legal person securities accounts with their interbank market filing and certification documents and other materials, and can thus invest in the exchange's bond market. Second, specifying trading and settlement paths. Overseas institutional investors may, as brokerage clients, entrust domestic securities companies with SZSE membership to participate in bond trading, and domestic securities companies with settlement participant qualification to handle the settlement in the brokerage business model. Third, detailing the investment scope. Overseas institutional investors may participate in the issuance, subscription, trading or transfer of bonds, asset-backed securities, and bond and asset-backed securities investment funds in the exchange's bond market, and the derivatives and bond lending trading (such as credit protection instrument) for risk management purposes. Fourth, specifying information submission requirements. Domestic trustees shall report basic information on overseas institutional investors and their entrusted institutions to SZSE, and submit relevant information to SZSE in a timely manner in case of any change in the information regarding those overseas foreign institutional investors, as well as litigation, punishment and other major events involved. Fifth, clarifying self-disciplinary supervision arrangements. SZSE and CSDC shall implement self-disciplinary supervision to overseas institutional investors and their entrusted securities companies and trustees based on the Implementation Rules.
Next, according to the unified plan of CSRC, SZSE will take solid steps to complete relevant work. First, SZSE will conduct special roadshow and training together with membership institutions and entrusted institutions to deepen the understanding of SZSE's bond market by overseas institutional investors and support eligible overseas institutions to enter the market in accordance with the Implementation Rules. Second, SZSE will consistently strive to make participation more convenient for overseas institutional investors, encourage diverse investors to stably and continuously invest in the bond market, boost the high-quality opening-up of the capital market and better serve the high-quality development of real economy.
