Trading & Settlement Mechanism

Under the offshore repo arrangement, Northbound Bond Connect participants can use eligible onshore bonds as collateral to conduct RMB repo business with the Offshore Market Maker.

All existing Northbound Bond Connect investors, including Central Moneymarkets Unit (CMU) members and offshore investors with CMU sub-accounts opened through Hong Kong custodian banks that are CMU members are eligible as participating institutions.

Bonds held by participating institutions under Northbound Bond Connect, regardless of bond type. This includes all Cash Bonds in CIBM, namely, all types of rates and credit bonds.

Participants may choose their own repo agreement template (e.g., Global Master Repurchase Agreement (GMRA) or National Association of Financial Market Institutional Investors (NAFMII)’s Bond Repurchase Master Agreement, etc.).

Transactions may be conducted:

1. bilaterally over-the-counter (OTC);
2. in the same manner as existing Northbound Bond Connect transactions, and via the linkage between the infrastructures in the onshore and offshore markets;
3. through offshore electronic trading platforms;
4. through onshore electronic trading platform;

Trading hours: 09:00-12:00; 13:30-16:50 (HKT)
Settlement Arrangement: Settlement will be completed under the Repo Service by CMU. Settlement currencies include RMB, HKD, USD and EUR.
Settlement Cut-off Time:
For more information on CMU and custodian operations, please refer to the CMU Reference Manual.

Offshore market makers are required to report transaction data to the HKMA on the same day of the transaction for market monitoring purposes. The specific information to be reported includes: names of the trading institutions (including both the repo party and the reverse repo party), total amount of funds borrowed by the repo party, bond name, bond code, repo term, total face value, repo rate, transaction/first settlement date, settlement amount, trading platform/means, default-related information, etc.