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.
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.