China, Russia eye bond connect

17 October 2015
Print version

CHINA and Russia are set to launch a cross-border settlement infrastructure to allow direct investment of government bonds between them in 2016, Russia’s central securities depository said yesterday.

The planned bond link will be the first common project between Russia’s National Settlement Depository and China Central Depository and Clearing Co since a memorandum of understanding was signed in June to boost cooperation and enhance information sharing between the two bodies.

“After we met our counterparts from China in Beijing yesterday, we are quite optimistic and we prepare to launch the infrastructure next year,” Eddie Astanin, who chairs the executive board of NSD, told Shanghai Daily in an interview yesterday.

The project will be comparable to Euroclear Bank SA’s bond, stock and currency-settlement services, which offers Russian issuers direct access to China’s mainland bond market.

Maria Ivanova, NSD’s vice president responsible for business development and client relations, said that after correspondent accounts in the central securities depositories are set up on each side, the bodies will sort out details such as the standard of communication and the compatibility of IT system.

Russian Deputy Finance Minister Sergey Storchak said last month that the country is considering the issuance of yuan-denominated government bond as soon as next year, which could be the first sale of Chinese mainland yuan bond by a foreign government.

Meanwhile, Astanin sees a link between the two countries’ stock markets, similar to the Shanghai-Hong Kong Stock Connect, as possible depending on investor demand.

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