The Southbound Bond Connect is an arrangement that enables Mainland institutional investors to invest in the Hong Kong bond market through connection between the Mainland and Hong Kong financial infrastructure services institutions.
Under the Southbound CSD-CSD settlement link, the Mainland central securities depositories (Mainland CSDs) have joined the CMU as members to settle Southbound Bond Connect transactions and hold CMU securities on behalf of eligible Mainland institutional investors through the nominee securities account opened with the CMU.
Currently, the Southbound Bond Connect has a daily investment quota set at RMB 20 billion and an annual limit of RMB 500 billion.
The scope of eligible securities is specified in the relevant notices promulgated by the PBoC. All securities lodged with CMU and supported by CIPS settlement are eligible.
Eligible Onshore Investors
Please refer to Question 4 of PBOC Q&A with media on the Southbound under Mutual Bond Market Access between Mainland China and Hong Kong (Chinese only).
Rules and Policy Related to Southbound Trading
Investors may refer to the Southbound Trading Rules and Policy section of the BCCL website for the latest trading announcements.
Benefits for Onshore Investors Investing Through Southbound Bond Connect
- Eligible onshore investors can, through the CSD-CSD link, invest in debt securities lodged with the CMU
- Under the Southbound Bond Connect scheme, onshore investors can directly trade any eligible bond via the trading link with market makers in Hong Kong
- There is an annual aggregate investment quota (currently set at RMB500 billion) and daily investment quota set (currently set at RMB20 billion) for the Southbound Bond Connect scheme. There is no quota apply to each trade nor each eligible onshore investor
Settlement of transactions in the CMU system is effected on a DvP basis with securities settled in CMU while payments in CIPS.
Renminbi and Hong Kong dollars through the CSD-CSD link model and no limitation on the custodian bank route.
Ranged from T+1, T+2, T+3 and T+N where N is any number of days supported by the relevant Mainland CSDs.
The Service is available on a day when the CMU system, CHATS, the Mainland CSDs and the CIPS are all open for business. Holiday information of the respective systems are as follows:
Public holiday in Hong Kong is available at: https://www.gov.hk/en/about/abouthk/holiday/
Public holiday in Mainland China is available at: http://www.gov.cn/zhengce.
The CMU supports all types CA services for debt securities to Mainland CSDs.
List of Market Makers in Hong Kong
Please click here to visit the BCCL website to view the list of market makers.
- Please refer to Section 6 under Part II of the CMU Reference Manual on Reference Materials page
- Northbound Bond Connect