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The First Day of Bond Pass: Industrial Bank Closes the First Deal as A Shareholding Bank
On July 3, the first day of the“Bond Pass” under the spotlight of the market, Industrial Bank (IB) as one of the first market makers, concluded the first deal as a shareholding bank with an overseas institution.As of 11:00 a.m. today, IB has concluded 8 secondary market transactions and become one of the market makers having the most overseas trading counterparties. Currently, the quotation for the first day’s trading is still in full swing.Through Bond Pass business, IB has further enhanced its ability as a market maker and overseas market influence, and will set its new milestone in the fields of fixed income, foreign exchange and bulk commodity trading business (referred to as FICC business).
On May 16, the People's Bank of China and Hong Kong Monetary Authority issued a joint announcement on the consent to carry out interconnection and communication cooperation between the Hong Kong and Mainland bond markets (referred to as "Bond Pass”). The opening of "Bond Pass” marks a major step towards the opening up of interbank bond market in China and expands the way and path for international investors to enter the China’s bond market. In the meantime, it is beneficial for consolidating and improving the position of Hong Kong as an international financial center, promoting cooperation between the Mainland and Hong Kong in terms of regulation and law enforcement, investor protection and finance.
"Bond Pass" currently only enables "North to Pass", that means qualified overseas investors satisfying the requirements of the Central Bank can invest in the mainland interbank bond market through the arrangement of the interconnection and communication mechanism between Hong Kong and Mainland infrastructure agencies in the aspects including transaction, custody and settlement. The underlying bonds include all types of bonds which can be traded in the interbank bond market. "South to Pass” will be enabled when it is the right time.
“Applying the common mode on the international bond market, Bond Pass provides overseas institutions with a new channel to enter the market conveniently through the connection with domestic and overseas infrastructure, increasing efficiency of entering the market.” Ma Dajun, the general manager of IB Capital Operation Center, said, “Bond Pass” was not only the inevitable result of implementing the Renminbi internationalization strategy, but also the latest achievements from the gradual opening up of China's bond market.
As one of the 20 market makers of “Bond Pass”, IB has been always active in interbank market. In the aspect of interbank bond market trading, in 2016, the total number of Industrial Bank’s bond and cash bond transactions was 24,300 counts with the trading volume of RMB 3.74 trillion. IB ranked the seventh place in terms of trading volume in the whole market, ranked second in terms of the market maker business and ranked eight in terms of X-BOND (Interbank bond market anonymous click business), and won the title of "Excellent Bond Dealers” of China Foreign Exchange Trade Center.
In recent years, with its accelerated pace towards the transformation of light capital and high efficiency, IB greatly developed FICC business in the field of financial market business and focused on investment and trading and risk management of Renminbi, exchange rate, interest rate, credit spread, bulk commodities and its derivatives, committed to becoming a comprehensive solution provider integrating financing, trading, investment and hedging functions.
“In the aspect of FICC business with the core of the marketization of service interest rate and exchange rate, credit hedge and cross-border finance, by closely relying on IB Capital Operation Center and taking advantage of two international platform including Hong Kong Branch and Shanghai Free Trade Zone FT account under matrix management mode, IB actively expanded and accumulated international trading counterparties of various classes of business, developed innovative business modes according to international practices and continuously deepened business cooperation and relationship, shaping a sound reputation and certain influence in the international market.” Said Chen Xinjian, the Vice President of IB.