Clearstream and Chinese CSD cooperate on Chinese Bond Market

  • Partnership supports settlement and custody for international investors
  • Official launch of a cross-border cooperation

The China Central Depository and Clearing Company (CCDC) and Clearstream Banking S.A. have entered a partnership. Today’s signing of a Memorandum of Understanding (MoU) marks the official launch of the cross-border cooperation. It will give full consideration to the characteristics of the Chinese Interbank Bond Market (CIBM), while respecting the market’s current regulatory framework and basic institutional arrangements.

By combining the advantages of CCDC as a Chinese local institution and Clearstream in servicing overseas clients, the linkage will facilitate CIBM entrance for overseas investors. CCDC is one of the main onshore CSDs for Chinese onshore fixed income instruments.

With depository and settlement infrastructures being the cornerstone of safe, efficient and functional bond markets, linkages between financial market infrastructures are an important approach to support the bond market in opening up.

Shui Ruqing, Chairman of CCDC, said: “We see this cooperation as an opportunity for both institutions to provide better cross-border depository and settlement services for RMB fixed-income products based on their respective platforms.”

Clearstream Chairman Jeffrey Tessler added: “The Chinese market has always been at the centre of Clearstream’s Asia strategy, and Clearstream has been watching the development of CIBM and RMB financial asset-related services with great enthusiasm.”

In recent years, the opening up of the China Interbank Bond Market led by the People’s Bank of China and other regulatory authorities has made immense progress. This can be noticed in an expanded scope of qualified overseas investors, the removal of quota restrictions and simplified administration procedures. So far, more than 430 overseas investors have entered CIBM and opened accounts with CCDC, currently holding around 800 billion RMB (approximately 116.5 billion USD) of bond assets, accounting for 90% of the total bond holdings of overseas investors in CIBM.

About China Central Depository & Clearing Co., Ltd. (CCDC)

The China Central Depository & Clearing Co., Ltd. (CCDC) is the sole Central Securities Depository (CSD) established with the approval of the State Council of China. The institution, as a core financial market infrastructure, supports the daily operation of the China Interbank Bond Market (CIBM) and functions as a core platform for CIBM opening up. Up to now, CCDC has over 43 trillion RMB (approx. 6.3 trillion USD) of bonds (including the vast majority of sovereign, quasi-sovereign and high-grade bonds in China) under its depository, and had settled transactions valuing more than 1,000 trillion RMB (approx. 145.7 trillion USD) over 2016. More than 15,000 accounts have been opened with CCDC by domestic investors and over 430 overseas investors.

About Clearstream

As an international central securities depository (ICSD) headquartered in Luxembourg, Clearstream provides the post-trade infrastructure for the Eurobond market and services for securities from 56 domestic markets worldwide. With 13 trillion Euros in assets under custody, Clearstream is one of the world’s largest settlement and custody firms for domestic and international securities and part of Deutsche Börse Group.