Bloomberg announced a collaboration with China Foreign Exchange Trade System (CFETS) to launch a new solution for offshore market participants’ RMB bond repo trading. Following arrangements made by the Hong Kong Monetary Authority, Northbound Bond Connect participants are allowed to use eligible onshore bonds as collateral to conduct RMB repo business in Hong Kong.
With the new solution, offshore investors can negotiate repo financing rates and execute transactions using eligible Northbound Bond Connect bonds as collateral with designated market makers in Hong Kong via the Bloomberg Terminal, which has had connectivity with CFETS since 2019.
Authorized users can submit Request-for-Quote (RFQ) for repo and/or reverse repo through Bloomberg’s Electronic Repo Trading (BOLT REPO). The selected market makers respond with quotes via CFETS platform, completing the transaction upon confirmation.
“Launching the offshore repo arrangement is a thoughtful step to drive liquidity in offshore RMB market, and to strengthen Hong Kong’s position as a world-leading offshore RMB hub and financial center. It will also help accelerate global investors’ participation in China’s bond market over the long term,” said Bing Li, head of Asia Pacific at Bloomberg, in a statement. “Bloomberg is proud to utilize our technology to support Bond Connect investors as they conduct repo trades under the new arrangement without disruption to their current workflows.”