China opens up interbank bond market to foreign institutional investors
In February 2016, the People’s Bank of China in a significant move announced the opening of China’s interbank bond market to a wide array of foreign institutional investors.
Further to that announcement, on 27 May 2016, the Shanghai headquarters of PBOC and the State Administration for Foreign Exchange published the much anticipated Foreign Institutional Investors Rules implementing the opening up of the interbank bond market. Following these developments, a wide range of foreign institutional investors can now invest in China’s burgeoning interbank bond market without prior approval or licence from Chinese regulators.
In this bulletin we will set out the key features of the framework under the Foreign Institutional Investor Rules; and a discussion of certain key legal and documentation issues to be considered under the Foreign Institutional Investor Rules.