Participants attend a ceremony held by Hong Kong Exchanges and Clearing Limited to launch the "northbound" mainland-Hong Kong bond connect in Hong Kong, south China, July 3, 2017. With the northbound trading kicking off after the ceremony, qualified overseas investors will be able to invest in the Chinese mainland interbank bond market via the mainland-Hong Kong bond connect program.(Xinhua/Wang Shen)
BEIJING, March 12 (Xinhua) -- China Foreign Exchange Trade System (CFETS) rolled out information service for foreign exchange (forex or FX) risk management under the Bond Connect northbound trading on Friday, reported Xinhua Finance, a Xinhua-run financial information platform.
CFETS took the move to facilitate settlement banks in China's Hong Kong Special Administrative Region (Hong Kong SAR) to provide foreign institutional investors of Bond Connect northbound trading with currency conversion and FX risk management services.
Bond Connect, launched in Hong Kong SAR in July 2017, is a mutual market access scheme allowing investors from the Chinese mainland and overseas to invest in each other's bond market. It includes the already operating northbound trading and to-be-explored southbound trading.
According to CFETS announcement, Hong Kong SAR settlement banks can, under the authorization of Bond Connect investors, access to the information of the investors' currency conversion, foreign exchange hedging and bond investment under the Bond Connect scheme, including the data derived from calculation on Chinese yuan (CHY) or FX risk exposure, outstanding balance of bonds, CHY conversion, bond purchase and sale, etc.
CFETS says Hong Kong SAR settlement banks shall apply to CFETS for the FX risk management information services under the Bond Connect scheme, and shall undertake that the information obtained through this service will only be used for authenticity review and monitoring.
Bond Connect investors, when filing their designated Hong Kong SAR settlement banks with CFETS in accordance with CFETS’ related notice, may authorize CFETS to provide designated Hong Kong SAR settlement banks with the information services for business needs under the Bond Connect scheme. If Bond Connect investors need to change their authorization, they should re-submit the authorization materials.
CFETS thus grants service permission, based on the Bond Connect investors' authorization, for the Hong Kong SAR settlement banks that apply for the service. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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