ICMA welcomes new measures by the People’s Bank of China (PBoC) and Hong Kong Monetary Authority (HKMA) to further open up China’s onshore repo market to global investors
8 July 2025 Today, the PBoC and HKMA jointly announced further enhancements to the Bond Connect and the offshore repo arrangement at the Bond Connect Anniversary Summit. The Southbound Bond Connect has expanded its investor scope to include securities firms, fund companies, insurance companies and wealth management companies, effective 8 July. The offshore repo arrangement will now support re-hypothecation (allowing collateral reuse in four specific use cases) and cross-currency repo transactions (expanding from RMB-only to include HKD, USD, and EUR). Central Moneymarket Unit (CMU) OmniClear will enhance operational arrangements to support these enhancements, effective 25 August this year.
ICMA has been proactively engaging with Chinese member firms and regulators regarding the opening up of China’s onshore repo market to global investors. In February last year, ICMA submitted a response to the PBoC consultation on further opening up China’s repo market to offshore investors, potentially through the use of the Global Master Repurchase Agreement (GMRA).
One of the key policy outcomes of the 11th UK-China Economic and Financial Dialogue concluded in January this year was the commitment to further collaboration between the PBoC and ICMA to support China’s adoption of the GMRA for cross-border repo transactions.
Earlier in January, the HKMA announced a new offshore repo arrangement, enabling Northbound Bond Connect participants to use onshore bonds to conduct RMB repo transactions. During the initial phase, these transactions must involve at least one designated market maker and be settled through the triparty repo services provided by the CMU which commenced in February. Participants may either choose the GMRA or the Bond Repurchase Master Agreement issued by the National Association of Financial Market Institutional Investors (NAFMII) as their master agreement.
ICMA will continue to closely monitor developments in China’s evolving repo landscape (both onshore and offshore), particularly in relation to market opportunities and challenges arising from ongoing reforms. ICMA also remains committed to promoting the use of the GMRA for cross-border repo transactions and to working with relevant Chinese regulators to enhance legal certainty around the enforceability of close-out netting in China.
We welcome any market observations, comments, or recommendations regarding the latest offshore repo arrangements. Please reach out to Alex Tsang to share your feedback.
