China releases rules for management of foreign institutional investor funds in bond market

BEIJING - China's financial authorities have released regulations to optimize fund management requirements for foreign institutional investors in the country's bond market.

The regulations, effective from Jan 1, 2023, were jointly released by the People's Bank of China and the State Administration of Foreign Exchange to facilitate the opening-up of the domestic bond market.

The regulations set out unified requirements for the management of foreign institutional investor fund accounts, statistical monitoring, and the receipt, payment and exchange of funds.

They have also optimized the management of spot foreign exchange settlements and sales, as well as refined foreign exchange risk management policies.

Under the regulations, foreign institutional investors will have more channels for foreign exchange hedging, and the limit on the number of counterparties in over-the-counter transactions will be removed.

The rules also make it easier for foreign institutional investors to remit investment funds, and aim to encourage long-term investment in China's bond market.

Sources at the central bank said the regulations will provide more convenience for foreign institutional investors and increase the appeal of China's bond market.