On September 26, the People's Bank of China, the China Securities Regulatory Commission and the State Administration of Foreign Exchange jointly issued the announcement on further supporting foreign institutional investors to carry out bond repurchase business in the Chinese bond market (hereinafter referred to as the Announcement). The People's Bank of China, China Securities Regulatory Commission, and State Administration of Foreign Exchange further support various overseas institutional investors to carry out bond repurchase business, which is not only conducive to meeting market demand and further enhancing the attractiveness of RMB bond assets, but also conducive to optimizing the qualified overseas investor system, consolidating and enhancing Hong Kong's position as an international financial center, and promoting the coordinated development of onshore and offshore RMB markets. In terms of business model, the People's Bank of China has deeply summarized the practice of domestic and foreign repurchase markets, strengthened the connection between interbank bond repurchase mechanisms and international market practices, achieved the transfer and usability of underlying bonds, provided more convenience for overseas institutional investors to carry out bond repurchase business, and also promoted the optimization of domestic bond repurchase business mechanisms. In the next step, the People's Bank of China, the China Securities Regulatory Commission and the State Administration of Foreign Exchange will continue to improve various mechanisms and arrangements with relevant parties, and steadily promote the high-level institutional opening of China's bond market. Promoting the interconnection of onshore and offshore financial markets In recent years, China's bond market has achieved positive results in opening up, the number of foreign institutional investors investing in China's bond market and the scale of holding bonds have expanded, and the demand for liquidity management through bond repurchase business has continued to increase. By the end of August 2025, a total of 1170 overseas institutions from 80 countries and regions had entered the Chinese bond market, with a total bond holdings of about 4 trillion yuan. With the continuous expansion of bond holdings by overseas institutional investors, the demand for conducting bond repurchase business to improve the efficiency of fund utilization continues to increase. The People's Bank of China has been orderly promoting the opening up of bond repurchase business in the interbank bond market. Since 2015, it has supported overseas sovereign institutions, overseas RMB clearing banks, and overseas participating banks to carry out bond repurchase business in the interbank market; In 2025, together with the Hong Kong Monetary Authority, we will launch the offshore repo business with "Bond Connect" North Link bonds as the target. The relevant responsible persons of the People's Bank of China and the State Administration of Foreign Exchange said that in order to further meet the needs of foreign institutional investors to carry out liquidity management through bond repurchase, promote the interconnection of the onshore and offshore financial markets, and promote the high-level opening up of China's bond market, the People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange jointly issued an announcement to support various types of foreign institutional investors to carry out bond repurchase business in the Chinese bond market. After the release of the Announcement, foreign institutional investors in the inter-bank bond market can participate in the bond repurchase business, including all foreign institutional investors who enter the market directly or through the "Bond Connect" channel. The types of investors include: overseas central banks or monetary authorities, international financial organizations, sovereign wealth funds; Various financial institutions such as overseas commercial banks, insurance companies, securities companies, fund management companies, futures companies, trust companies, and other asset management institutions, as well as medium - and long-term institutional investors such as pension funds, charitable funds, and donation funds. In addition, overseas financial infrastructure, self regulatory organizations, and industry associations can provide services for overseas institutional investors to carry out bond repurchase business in the interbank bond market. Relevant behaviors should comply with Chinese laws and regulations and financial management department regulations. Overseas self regulatory organizations and industry associations should file the standard version of the main agreement with the People's Bank of China. At present, there are operational differences between China's pledged bond repurchase and international market bond repurchase in terms of transfer and usability of the underlying bonds. The pledged bond repurchase underlying bonds have not been transferred from the main repurchase party to the reverse repurchase party, but have been frozen in the main repurchase party. The mainstream repurchase model in the international market adopts the transfer and usability of the underlying bonds, similar to the buyout style repurchase in the interbank bond market. ”The aforementioned person in charge stated that during the drafting process of the Announcement, overseas institutional investors generally reflected that adopting the transfer and usability model of the underlying bonds has clear rights and responsibilities, convenient default disposal, is more in line with the trading habits of overseas institutional investors, and is conducive to improving the overall liquidity of the bond market. After the announcement is released, overseas institutional investors will conduct bond repurchase business in the interbank bond market, adopting international market practices to achieve the transfer and usability of the underlying bonds. At the same time, in order to facilitate the smooth transition of overseas institutional investors who have already carried out bond repurchase business in the interbank bond market, such institutions can still conduct transactions according to the original mode during the transition period, which is 12 months from the implementation date of the Announcement. Turning to the considerations and measures of foreign institutional investors in carrying out bond repo business in terms of risk prevention, the above-mentioned person in charge said: "Overall opening and security are the basis for the high-level opening of the financial market, and are also important principles for promoting foreign institutional investors to carry out bond repo business. We strengthened the design of bond repo business carried out by foreign institutional investors in terms of transaction, custody, settlement, exchange and other links, realized closed-loop capital management, and strengthened penetrating supervision and monitoring through transaction custody data reports and other ways." For the counterparty, foreign institutional investors who carry out bond repo business through the "Bond Connect" channel, initially followed the cash bond trading mechanism, and carried out bond repo transactions with market makers. Market makers should have strong ability to quote funds and bonds. They will be selected from the primary dealers in the open market with outstanding market making performance of "Bond Connect", and the list will be published by the National Interbank Funding Center. In terms of quota management, market makers' financial limits comply with the unified management framework for cross-border RMB interbank financing business. The repurchase balance of overseas institutional investors shall be managed in accordance with the regulations on the leverage ratio of buyout style repurchase in the interbank bond market. Specific requirements shall be clarified in the implementation rules issued by the interbank market infrastructure. In addition, the aforementioned person in charge stated that foreign institutional investors conducting bond repurchase business in the interbank bond market should comply with the fund and account management regulations of their corresponding investment channels for cash bond transactions. The specific implementation shall be in accordance with the relevant provisions of the Provisions on the Administration of Funds Invested by Foreign Institutional Investors in the Chinese Bond Market, the Announcement of the State Administration of Foreign Exchange of the People's Bank of China [2020] No. 2, the Announcement of the State Administration of Foreign Exchange of the People's Bank of China [2022] No. 4 and other relevant provisions. (New Society)