People's Bank of China to facilitate overseas bond insurance

The People's Bank of China, the country's central bank, and the State Administration of Foreign Exchange, jointly issued a set of four measures on Friday to better facilitate overseas financial institutions' bond issuance in the Chinese onshore market.

The management rules for panda bond, or yuan-dominated bonds issued by overseas institutions in the Chinese onshore market, should be unified in terms of capital registration, account opening, capital exchange and use, as well as statistical monitoring in the interbank and exchange markets, according to the notice.

The registration and account opening processes should be standardized, said the notice. The account registration for the bond issuer should be done at the bank before official issuance of any product. For issuance in installments, the issuer is allowed to register and open an account for the first phase, and to submit issuance information one by one for subsequent issuances. The different stages of bond issuance can be completed under one account.

Meanwhile, overseas institutions can conduct foreign exchange derivatives transactions with domestic financial institutions to manage exchange rate risks.

Last but not least, the fund raised by issuing panda bonds can either be kept in the Chinese onshore market or remitted overseas for other uses.

The notice, which is part of China's continued efforts in terms of two-way opening-up in the financial market, will take effect on Jan 1, 2023.