Northbound Bond Connect

Northbound Bond Connect allows offshore investors to participate directly in China's onshore bond market. Under this scheme, CMU has streamlined and shortened the investor application process, adopting a nominee account structure. This enables offshore investors to settle and hold CIBM bonds through CMU using existing practices and continue trading via offshore trading platforms currently in use, bringing global investment full circle.

Through the Northbound settlement link, CMU has opened nominee accounts with two Mainland central securities depositories, namely the China Central Depository & Clearing Co., Ltd (CCDC) and Shanghai Clearing House (SHCH). This arrangement facilitates the settlement of Bond Connect transactions and the holding of CIBM bonds on behalf of CMU members for their overseas investor clients, embodying a commitment to providing industry-leading risk management and flexibility.

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Northbound Trading follows Mainland China's current policy framework governing overseas participation in the CIBM while respecting international norms and practices. There is no investment quota for Northbound Trading, unlocking the boundless potential for global investors.

Benefits for Offshore Investors Accessing CIBM Through Bond Connect

• Seamless Access Using International Practices: Eligible offshore investors can trade directly through recognised offshore international trading platforms* and settle through existing global and local custodian arrangements. Bonds are held through nominee accounts opened by CMU in Mainland China with SHCH and CCDC, requiring no onshore presence for investors.
• Streamlined Account Opening: The investor application process is simplified, offering the shortest approval turnaround time among all access channels.
• Enhanced Operational Efficiency: Automated operation and reporting services tailored for Bond Connect investors make the flow of funds and information more efficient, forming a seamless circle of operational excellence, empowering investors to navigate global bond markets with ease and confidence.
• Flexible Settlement Options: Investors have the flexibility to choose to use offshore RMB or foreign currencies for settlement.

Eligible Securities

The scope of eligible securities is specified in the relevant notices promulgated by PBoC. It currently covers all bonds tradable in the CIBM.

CMU members may enquire issue details of the eligible securities already accepted by the CMU system via their CMTs or view it here.

How Can Offshore Investors Participate in the Bond Connect Scheme

Eligible investors should open an account with the CMU if they fulfil the eligibility criteria for CMU Membership or engage with a global/local custodian who is a CMU member, and submit the application forms to Bond Connect Company Limited (BCCL) for onboarding. The qualified applications will then be submitted to CEFTS and PBoC for pre-filing. Upon completion, investors are ready to trade through recognised trading access platforms*.

Click here to view the CMU member list.

For eligibility and detailed application process, please refer to BCCL website. 

*Recognised trading access platforms are Tradeweb, Bloomberg and MarketAxess.

Settlement

Settlement Method

Settlement of transactions in the CCDC and SHCH system is effected in DvP mode, in real time and on gross basis.

Settlement Currency

Bonds are settled in Renminbi in CCDC and SHCH. For foreign currencies, foreign exchange (FX) conversion has to be done via Hong Kong FX Settlement Banks authorised by CEFTS before remitting the Renminbi proceeds to CIPS for further settlement.

Settlement Cycle

Ranged from T+0, T+1, T+2 or T+3 and T+N where N is any number of days supported by the relevant Mainland CSDs.

Settlement Calendar

Settlement calendar (including working Saturdays/Sundays) and holiday arrangements will generally follow the CIBM schedule. The Linkage Service is available on a day when the CCDC system, CIPS and the RMB CHATS are all open for business, regardless of whether it is a holiday in Hong Kong. Public holiday arrangement in Mainland China is announced by the People's Republic of China from time to time which is available at its website: http://www.gov.cn/zhengce.

Given the public holidays are announced at the start of each year, relevant Mainland authorities and/or CSDs may also announce special working days, including Saturdays and/or Sundays, as ad hoc working days for CIBM and/or Bond Connect settlement days. 

Corporate Actions

The CMU supports all types of CA services for Bond Connect CMU members.

Tendering of Primary Issues

To facilitate overseas investors to participate in the tendering of primary issues in SHCH, CMU members who subscribed to the Bond Connect services can submit tender applications for eligible investors through the CMU.

Rules and Policy Related to Northbound Trading

Investors may refer to the BCCL website for information from on boarding requirements to all Northbound Trading Rules, as well as the latest policy update.

Onshore Market Makers

Please click here to view the list of market makers on the BCCL website.

FAQ and Related Information