Bloomberg and CFETS to Collaborate on China’s Bond Market Development

Global investors will gain additional access, efficiency and connectivity to trade China’s $12 trillion bond market

A man carrying a kite in the shape of the Chinese national flag walks along the Bund while buildings of Pudong’s Lujiazui financial district stand across the Huangpu River as the sun rises in Shanghai, China. Photographer: Qilai Shen/Bloomberg

Beijing, Hong Kong, New York, 30 November, 2018 — Bloomberg today announced that it and its global affiliates will in the coming weeks, finalize plans to offer qualified investors access to China’s interbank bond market (“CIBM”) via the Bloomberg Terminal, which has over 325,000 global subscribers. This is part of a broader collaboration with China Foreign Exchange Trade System (National Interbank Funding Centre) (“CFETS”), and follows China’s recent measures to reform its $12 trillion bond market, paving the way for more overseas funds to trade onshore.

“A growing number of international investors are demonstrating keen interest and participating in China’s bond market via CIBM Direct and Bond Connect,” said Zhang Yi, President of CFETS. “The Bloomberg Terminal has a robust network of the world’s major fixed income market participants, and the firm has deep experience in developing global bond markets. We look forward to working with Bloomberg to facilitate greater foreign investment as we continue to internationalize China’s fixed income market.”

Since 2010, global investors can enter China’s interbank bond market via CIBM Direct, which requires foreign qualified participants to mandate an onshore agency bank to complete trade and settlement. In 2017, Bond Connect was made available, which allows foreign investors to send a request for quote from an international electronic trading platform to CFETS. Bloomberg and CFETS will be working together to support investor access to both CIBM Direct and Bond Connect.

Under the CIBM Direct scheme, Bloomberg will work with CFETS to offer a new trade connectivity service for investors participating in China’s bond market. The new trade ticket communication service will provide qualified offshore participants and their corresponding onshore agency banks an efficient way of confirming and communicating trade details to and from the trading system of CFETS via Bloomberg’s voice confirmation feature (“VCON”).

This collaboration will also enable access to Bond Connect via Bloomberg, which is designed to be open to investors in global markets, including Hong Kong, Singapore and the United States, following receipt of required regulatory approvals. Bloomberg’s fixed income execution management system (“TSOX”) will be connected to CFETS, providing overseas investors a new gateway for access to Bond Connect.

“We welcome the announcement made by the People’s Bank of China and are excited by the opportunity to facilitate greater investor access to China’s bond market,” said Peter Grauer, Chairman of Bloomberg L.P.  “This is yet another milestone in the opening up of China’s financial markets. Global investors will be encouraged by the additional access and efficiency to trade in China’s bond market, which will drive further foreign participation. We look forward to working with CFETS and all other parties to advance China’s pace of reform and bond market development.”

Today’s announcement follows the launch of Bloomberg’s RMB Bond Suite, an advanced set of fixed income analytical tools for China’s bond market, and will complete the workflow for offshore bond investors who need to access data, analyze opportunities and trade.

According to data from People’s Bank of China, foreign holdings of Chinese onshore bonds grew by 58 percent in the 12 months to the end of September 2018, reaching RMB 1.75 trillion ($251 billion).

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