BEIJING: Tradeweb, a fixed-income trading platform, will connect with China Foreign Exchange Trading System (CFETS) to be the main interface for offshore investors trading in China’s bond market through the country’s upcoming “Bond Connect” scheme, the company said on Monday. Talks between Tradeweb and the Hong Kong exchange were exclusively reported by Reuters last August. Tradeweb, majority-owned by Thomson Reuters, the parent company of Reuters News, matches buyers and sellers of fixed income products across more than 22 international OTC bond markets.
In a statement, Tradeweb said that eligible overseas institutional investors from its network of more than 2,000 clients would be able to trade directly with liquidity providers in the CFETS market through Tradeweb’s platform. Investors trading through Tradeweb will be able to use global custodians to settle through a nominee holding arrangement provided by the Hong Kong Monetary Authority’s Central Moneymarkets Unit, the statement said.
Hong Kong and Chinese regulators said in May that they had approved the long-awaited “Bond Connect” program, with only “Northbound” trades – trading of Chinese bonds by foreign and Hong Kong investors – permitted in its initial stage. Regulators have not yet revealed a launch date for the scheme. China’s bond market is the world’s third largest, worth about 65 trillion yuan, or about $9.5 trillion, the Hong Kong Monetary Authority said in May.