The Hong Kong Monetary Authority (HKMA) announced today (8 July) enhancements to the offshore RMB bond repurchase (repo) business (Note 1), to facilitate the participation of Northbound Bond Connect investors in repo business. In particular, the enhancements include:
These two enhancement measures aim to adopt international market best practices and enhance operational efficiency. They will further expand the depth and breadth of the offshore repo market, improve the market-based mechanism for offshore RMB liquidity management, and broaden the use of onshore RMB bonds as collateral in the offshore market.
The above arrangements will be officially launched on 25 August 2025.
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Latest Arrangements of Offshore RMB Repo Business
To facilitate the smooth implementation of the enhancement measures, the latest arrangements for offshore RMB repo transactions (including repo transactions conducted using bond collateral acquired through a repo transaction) are set out as follows:
All existing Northbound Bond Connect investors, including CMU members and offshore investors with CMU sub-accounts opened through Hong Kong custodian banks that are CMU members.
Bonds held by participating institutions under Northbound Bond Connect, and bond collaterals acquired through offshore repo transactions, regardless of bond type.
(a) |
Master Agreement: Participants may choose their own repo agreement template (e.g., Global Master Repurchase Agreement (GMRA) or National Association of Financial Market Institutional Investors (NAFMII)’s Bond Repurchase Master Agreement, etc.). |
(b) |
Trading Arrangement: Transactions may be conducted:
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(c) |
Settlement Arrangement: Settlement will be completed under the Repo Service by CMU. Settlement currencies include RMB, HKD, USD and EUR. |
Hong Kong Monetary Authority
8 July 2025
Note 1: The HKMA announced the launch of offshore RMB bond repo business on 13 January 2025 (please refer to the HKMA press release). This measure was implemented on 10 February 2025.
Note 2: Operational details will be announced by CMU later. Currently, the rehypothecation of bond collateral is only applicable to repo transactions settled in the Delivery versus Payment model. The timeline for CMU’s tri-party repo service to support the rehypothecation of bond collateral will be notified separately in due course.
Note 3: Including 1) Agricultural Bank of China Limited, 2) Bank of China (Hong Kong) Limited, 3) Bank of Communications Co., Ltd., 4) BNP Paribas, 5) China CITIC Bank International Limited, 6) China Construction Bank (Asia) Corporation Limited, 7) Citibank, N.A., 8) Hang Seng Bank Limited, 9) The Hongkong and Shanghai Banking Corporation Limited, 10) Industrial and Commercial Bank of China (Asia) Limited and 11) Standard Chartered Bank (Hong Kong) Limited.
Note 4: The specific information to be reported includes: names of the trading institutions (including both the repo party and the reverse repo party), total amount of funds borrowed by the repo party, bond name, bond code, repo term, total face value, repo rate, transaction/first settlement date, settlement amount, trading platform/means, default-related information etc.