Citi has teamed up with Clearstream to provide international market participants with access to China’s fixed income market through the Bond Connect scheme.
From 20 November, Clearstream’s clients will gain quota-free access to the $10 trillion Chinese bonds market traded in the China Interbank Bond Market (CIBM) through the launch of its new service.
The service replicates the firm’s Stock Connect tool for China A-shares, where Citi also acts as Clearstream’s local sub-custodian.
Bond Connect is a trading and settlement scheme allowing institutional investors from Mainland China and overseas to trade in each other’s bond markets via a connection between related Mainland and Hong Kong institutions.
In July, just as the first phase of Bond Connect was launched, Citi was selected as an official Bond Connect trading dealer by the People’s Bank of China and received the Type-A bond settlement agent license in February.
Cindy Chen, head of securities services at Citi Hong Kong, explained the partnership with Clearstream will provide further ease of access to financial institutional looking to connect with the local China bond market.
Philip Brown, co-CEO of Clearstream Banking, described the Bond Connect scheme as a major breakthrough in the opening of Chinese capital markets.
“Our cooperation with Citi allows foreign investors to profit from this development, making access to the CIBM as easy and efficient as possible,” he added.