The partnership sets Tradeweb Markets up to become the main trading interface for offshore investors to access the new ‘Bond Connect’ between China and Hong Kong, allowing foreign investors access to the third largest bond market in the world.
Bond Connect was launched by the People’s Bank of China and the Hong Kong Monetary Authority in May, with the aim of enabling investors in mainland China and overseas to trade bonds in each other’s markets.
Through Bond Connect, the financial infrastructure institutions of mainland China and Hong Kong are connected in respect of trading, custody and settlement.
‘Northbound trading’ will begin in the initial phase, meaning overseas investors will be able to invest in the China inter-bank bond market.
Eligible overseas institutional investors will be able to trade directly with mainland Chinese liquidity providers in the CFETS market by utilising Tradeweb’s user interface to connect to the CFETS trading system.
Bond Connect will allow offshore investors to discover prices, submit orders and trade permissible onshore debt instruments.
Via the connection established in Tradeweb’s fully disclosed request-for-quote system, investors will be able to send requests to the market for all China inter-bank bond market cash bonds, removing the need to execute though an agent bank.
“We are pleased to be the first trading platform to link to Bond Connect, an offering leveraging the familiar practices already used by foreign investors through Tradeweb across other marketplaces,” said Lee Olesky, CEO of Tradeweb Markets.
“We believe the liberalisation of the Chinese bond market is a landmark event, and Tradeweb is excited to be acting as the first access link for this initiative. Given the strength of our investor network of over 2,000 clients globally, we are well positioned to help the evolution of this market.”
Hong Kong Exchange CEO Charles Li added: “The Bond Connect programme leverages the expertise the Hong Kong Exchange has had as a global exchange leader and Tradeweb’s experience as the global industry leader in driving flexible, electronic solutions for fixed income trading.”
“The extension of the connect family furthers the goal to connect China’s financial market with the world. Tradeweb’s deep fixed income experience and global client network are key to helping meet the Bond Connect objectives.”