The People’s Bank of China, China Securities Regulatory Commission and State Administration of Foreign Exchange announced a series of measures for overseas institutional investors conducting bond repurchase business in the Chinese bond market to “deepen the opening up of the financial market and further facilitate liquidity management for overseas institutional investors”, according to a machine translation of a press release.
The International Capital Market Association (ICMA) has been proactively engaging with relevant authorities and its Chinese member firms on the development of China’s onshore repo market and its opening to global investors.
“ICMA welcomes the efforts of the People’s Bank of China (PBoC) to broaden access for offshore investors to China’s repo market, including the potential application of the Global Master Repurchase Agreement (GMRA),” the association said in a statement.
ICMA and its membership are currently reviewing the final rules in detail to ensure that they will effectively facilitate title-transfer repo transactions from a legal, operational, and governance perspective and will continue to closely monitor the evolving landscape of China’s repo market, both onshore and offshore.
ICMA remains committed to supporting the use of the GMRA in cross-border repo transactions and to working constructively with Chinese regulators to strengthen legal certainty around close-out netting enforceability in China.