China’s PBOC issues new rules for QFII bond investors

19 March 2013   Category: News, China, Global   By Hui Ching-hoo

The People’s Bank of China (POBC) has unveiled a new set of rules that regulate QFII institutions’ access to the inter-bank bond market.

The rules are intended to diversify QFII institutions’ investment channels into the inter-bank bond market in accordance with the 'Measures for the Administration of Bond Transactions in the National Inter-Bank Bond Market' and the 'Administrative Measures for Registration, Custody and Clearing of Bonds in the Inter-Bond Market'.

Last July, the China Securities Regulatory Commission (CSRC) allowed QFII participants to purchase bonds on the inter-bank market. Before that, they were restricted to exchange-listed debts, which is less than 2% of the inter-bank equivalent.

The POBC said in a statement that the eligible applicants should have already received both approvals and QFII quotas from the CSRC and the State Administration and Foreign Exchange (SAFE). They are then required to submit relevant documents such as their financial reports for the previous three years to the PBOC.