Three Departments: Further Support for Overseas Institutional Investors to Conduct Bond Repurchase Transactions in China's Bond Market

    On September 26, 2025, the People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange(Three Departments) jointly issued an announcement supporting overseas institutional investors eligible to conduct spot bond trading in China's bond market to engage in bond repurchase transactions.

    In recent years, China's bond market has achieved positive results in opening up to the outside world. The number of overseas institutional investors investing in China's bond market and the scale of their bond holdings have expanded, and the demand for conducting liquidity management through bond repurchase transactions has continued to increase. As of the end of August 2025, a total of 1,170 overseas institutions from 80 countries and regions had entered China's bond market, holding bonds totaling approximately RMB 4 trillion. The People's Bank of China has systematically advanced the opening of bond repurchase operations in the interbank bond market. Since 2015, it has supported overseas sovereign institutions, offshore RMB clearing banks, and participating banks in conducting bond repurchase transactions within the interbank market. In 2025, it jointly launched offshore repurchase operations with the Hong Kong Monetary Authority, using Northbound Bond Connect bonds as collateral.

    The People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange have further supported various overseas institutional investors in conducting bond repurchase operations. This not only helps meet market demand and enhance the appeal of RMB bond assets but also contributes to optimizing the Qualified Foreign Institutional Investor (QFII) system, consolidating Hong Kong's status as an international financial center, and promoting the coordinated development of onshore and offshore RMB markets. In terms of business models, the People's Bank of China has thoroughly reviewed practices in both domestic and international repo markets, strengthened the alignment between the interbank bond repo mechanism and international market norms, and ensured the transferability and usability of underlying bonds. This provides greater convenience for overseas institutional investors engaging in bond repo transactions and also promotes the optimization of domestic bond repo mechanisms.

    Moving forward, the People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange will continue to thoroughly implement the overall strategic deployment of the CPC Central Committee and the State Council on expanding opening-up. Adhering to the principle of coordinating financial opening-up with security, they will work with relevant parties to continuously improve various institutional arrangements and steadily advance the high-level, institutional opening-up of China's bond market.

Full Text

Announcement by the People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange

No. 21 [2025]

    To deepen the opening-up of financial markets and further facilitate liquidity management for overseas institutional investors, the following matters concerning bond repurchase operations conducted by overseas institutional investors in China's bond market are hereby announced:

    I. The term “overseas institutional investors” as used in this announcement refers to overseas institutional investors eligible to conduct spot bond transactions in China's bond market, specifically including: overseas central banks or monetary authorities, international financial organizations, sovereign wealth funds; various financial institutions such as commercial banks, insurance companies, securities companies, fund management companies, futures companies, trust companies, and other asset management institutions lawfully established outside the People's Republic of China; as well as medium- to long-term institutional investors such as pension funds, charitable foundations, and endowment funds.

    2. The bond repurchase business referred to in this announcement includes both pledged repurchase and outright repurchase.

    3. Overseas institutional investors conducting bond repurchase business shall comply with Chinese laws, regulations, and provisions issued by financial regulatory authorities. Related fund receipts and payments shall conform to the fund and account management rules applicable to the corresponding investment channels for their spot bond transactions.

    Overseas institutional investors conducting bond repurchase transactions through the Qualified Foreign Institutional Investor (QFII) and Renminbi Qualified Foreign Institutional Investor (RQFII) channels shall comply with relevant regulations governing domestic investment, accounts, and foreign exchange management for QFIIs.

    IV. Relevant domestic financial market infrastructures shall formulate or revise their business rules and operational procedures, and submit them to the People's Bank of China, the China Securities Regulatory Commission, and other relevant financial regulatory authorities as required; They shall perform relevant trading, custody, settlement, and clearing services and monitoring duties. Upon discovering significant issues or abnormal circumstances, they shall promptly address them and report to the People's Bank of China, the China Securities Regulatory Commission, and other relevant financial regulatory authorities.

    V. Overseas financial market infrastructures, self-regulatory organizations, industry associations, and other entities providing services for bond repurchase transactions conducted by overseas institutional investors shall comply with Chinese laws, regulations, and the provisions of financial regulatory authorities, and shall accept supervision and administration in accordance with the law.

    VI. Domestic self-regulatory organizations shall strengthen self-regulatory oversight of bond repurchase transactions.

    VII. Foreign institutional investors shall execute master bond repurchase agreements in accordance with relevant requirements. Relevant self-regulatory organizations and industry associations shall file standard versions of such master agreements with the People's Bank of China, the China Securities Regulatory Commission, and other relevant financial regulatory authorities.

    VIII. The People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange shall enhance supervisory coordination. The People's Bank of China shall implement macroprudential oversight over bond repurchase activities conducted by foreign institutional investors in accordance with the law. The People's Bank of China and the China Securities Regulatory Commission shall, according to their respective responsibilities, supervise and manage bond repurchase activities conducted by foreign institutional investors in accordance with the law. The State Administration of Foreign Exchange shall strengthen foreign exchange transaction management involving bond repurchase activities conducted by foreign institutional investors in accordance with the law.

    9. For violations of laws, regulations, this Announcement, or relevant provisions of financial management departments, the People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange shall take supervisory and management measures in accordance with the law. Where administrative penalties are warranted under the law, penalties shall be imposed in accordance with laws and regulations such as the Law of the People's Republic of China on the People's Bank of China, the Securities Law of the People's Republic of China, and the Foreign Exchange Administration Regulations of the People's Republic of China.

    X. Institutional investors established in the Hong Kong Special Administrative Region, the Macao Special Administrative Region, and the Taiwan Region engaging in bond repurchase transactions shall be subject to the provisions of this Announcement.

    XI. This Announcement shall be interpreted by the People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange.

    XII. This Announcement shall take effect from the date of its issuance. The “Notice of the People's Bank of China on Overseas RMB Clearing Banks and Overseas Participating Banks Engaging in Bond Repurchase Transactions in the Interbank Bond Market” (Yinhui Fa [2015] No. 170) shall be repealed simultaneously.

People's Bank of China

China Securities Regulatory Commission

State Administration of Foreign Exchange

September 15, 2025