The following is issued on behalf of the Hong Kong Monetary Authority:

     In order to promote the development of the bond markets in Mainland China and Hong Kong SAR, the People’s Bank of China (PBC) and the Hong Kong Monetary Authority (HKMA) have approved China Foreign Exchange Trade System & National Interbank Funding Centre, China Central Depository & Clearing Co., Ltd, Shanghai Clearing House, together with Hong Kong Exchanges and Clearing Limited and Central Moneymarkets Unit (hereafter referred to as Financial Infrastructure Institutions of the Mainland China and Hong Kong SAR) to launch mutual bond market access between Hong Kong SAR and Mainland China (Bond Connect). Trial operation of Northbound Trading will commence on July 3, 2017. It is hereby announced that:

1. Since the joint announcement on May 16, 2017, the PBC and HKMA have worked closely to prepare for the launch of Bond Connect. For Northbound Trading, the relevant regulations, policies and operational and supervisory arrangements have been finalised, technical systems are ready, and market promotion as well as on-boarding are both underway.

2. The PBC and HKMA have agreed on the principles of cross-boundary supervisory cooperation under Bond Connect and have signed the “Memorandum of Understanding between the People’s Bank of China and Hong Kong Monetary Authority on Strengthening Supervisory Cooperation under Bond Connect” (Note 1). The two parties agreed, in accordance with the laws and legal authorisation of the Mainland China and Hong Kong SAR respectively, the two parties will establish effective mechanism for information exchange and execution assistance, strengthen supervisory cooperation and jointly combat cross-boundary illegal activities so as to ensure effective operation of the scheme.

3. The Financial Infrastructure Institutions of the Mainland China and Hong Kong SAR should perform their respective duties under Bond Connect in accordance with the relevant laws and regulations, organise the market participants to carry out the Bond Connect operations orderly and assist investors of Northbound Trading in their understanding of the relevant laws, regulations and policies of the Mainland bond market, investment risk assessment as well as on-boarding the China Interbank Bond Market.

Note:

1. The text of the Memorandum of Understanding can be found at www.hkma.gov.hk/media/eng/doc/key-information/press-release/2017/20170626e5a1.pdf

Ends/Sunday, July 2, 2017
Issued at HKT 8:00

NNNN