Clearstream to launch Bond Connect service

30.10.2017
  • Clearstream partners with Citi to offer international market participants access to China’s fixed-income market via Bond Connect
  • Investors profit from easy and quota-free access to CIBM from 20 November 2017

Clearstream is about to launch its service to support the cross-border bond trading and settlement scheme “Bond Connect”, linking the China Interbank Bond Market (CIBM) with the world. Starting from 20 November 2017, Clearstream customers will be able to access Chinese bonds traded in CIBM via Hong Kong.

The new service replicates Clearstream’s Stock Connect offering for China A-shares where Citi acts as Clearstream’s local sub-custodian. Today, Clearstream customers already benefit from direct access to the China onshore bond market via Clearstream’s China Bond Link. The new link complements this direct access link, which was launched last autumn.

Bond Connect is a new mutual access scheme that allows institutional investors from Mainland China and overseas to trade in each other’s bond markets through a connection between related Mainland and Hong Kong financial infrastructure institutions. The first phase of the scheme – Northbound trading – went live on 3 July 2017, facilitating foreign institutional investors’ access to China via the Hong Kong market.

With nearly USD 10 trillion the CIBM is the third largest bond market in the world. The launch of Clearstream’s Bond Connect link is part of Clearstream Banking’s ongoing commitment to provide international customers with enhanced access to the Chinese market. Overseas investors will benefit from the ICSD custody and connectivity infrastructure as well as standard suite of value-added services, including corporate action processing and reporting.

“As the leading global bank on Bond Connect, Citi is pleased to partner with Clearstream to provide further ease of access to global investors and financial institutions to access the local China bond market,” said Cindy Chen, Head of Securities Services, Citi Hong Kong. Citi announced that it was selected as an official Bond Connect Trading Dealer by the People’s Bank of China in July this year and received the Type A Bond Settlement Agent license in February 2017.

“China Bond Connect represents a major breakthrough in the opening of the Chinese capital markets, contributing to the growing international recognition of the important global role that the CIBM has assumed over the past years”, says Philip Brown, Co-CEO of Clearstream Banking S.A. “Our cooperation with Citi allows foreign investors to profit from this development, making access to the CIBM as easy and efficient as possible.”

About Clearstream

As an international central securities depository (ICSD) headquartered in Luxembourg and part of Deutsche Börse Group, 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.

About Citi

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerages, transaction services, and wealth management.