BNP Paribas (China) Limited has the Type A license to operate and provide full agency services (trade execution, settlement and local custodian) to foreign institutions, accessing the China Interbank Bond Market (CIBM), the world's third largest bond market after the US and Japan.
What does access to the China Interbank Bond Market mean for Institutional Investors?
A Grand Opening, a Global Markets and Securities Services joint whitepaper, explains the impact of this deregulation on foreign institutions in accessing the world's third largest bond market, worth some RMB49 trillion (US$7.7 trillion). The report explains and weighs the opportunities for long term investors to consider. Practical operational challenges are also addressed from repatriation rules to tax and prefunding rules.
As one of the four foreign banks with the Type A license, direct access could not be simpler. CIBM accounts for the bulk of debt securities (around 90% of the total market cap), the relaxation of regulations have unleashed many new opportunities, especially if you are interested in direct access to the onshore interbank bond market in China.