Chinese Mainland-Hong Kong OTC Bond Connect Should Roll Out, Says Government Advisory Body
Yicai Global
/SOURCE : Yicai
Chinese Mainland-Hong Kong OTC Bond Connect Should Roll Out, Says Government Advisory Body

(Yicai Global) Nov. 30 -- Allowing retail investors in both Chinese mainland and Hong Kong to have mutual access to each other's bond markets would be beneficial for further development of the bond market and the Shanghai-Hong Kong Stock Connect, says a local government advisory body in Hong Kong.

Giving investors access to their respective exchange-traded bond market and over-the-counter (OTC) bond market within the framework of the Shanghai-Hong Kong Stock Connect scheme would be conducive to interests of investors and the development of the bond market, says Hong Kong's Financial Services Development Council (FSDC) in its recommendation report titled "Proposal on the Mainland-Hong Kong Bond Market Connect."

Opening and maintaining a special trading account with designated banks in Chinese mainland and Hong Kong would make it easier for investors and broaden mutual access opportunities as most of the trading of bonds in both sides are conducted over-the-counter (OTC), recommends the FSDC report. This is particularly beneficial at a time when the demand from Chinese mainland for foreign fixed-income products is on the increase, says FSDC.

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