HSBC has partnered with specialised sub-custodian Clearstream to enable customers to access China’s Interbank Bond Market (CIBM).
HSBC will act as onshore bond settlement agent for Clearstream’s overseas institutional investor customers, providing trading execution, settlement and custody services in the CIBM.
Although China has been the source of a lot of global volatility in recent times, one major development has been the additional liberalising measures of China’s $7.4 trillion (€6.7 trillion) CIBM.
The bond market was opened to major foreign investors in 2015 but curtailed to public institutions such as central banks and sovereign wealth funds.
This deal is an important milestone in China’s development as a major international market. It comes after the recent inclusion of the renmimbi into the International Monetary Fund’s special drawing rights basket of reserve currencies, according to Philip Brown, co-chief executive officer of Clearstream Banking.
“Partnering with Clearstream places us in an excellent position to help foreign institutional investors tap into opportunities in CIBM which is the third largest fixed income market in the world,” said Ian Banks, head of HSBC securities services for Asia-Pacific.
Clearstream has almost €13 trillion in assets under custody.
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