| SHANGHAI, June 12
SHANGHAI, June 12 Chinese regulators on Monday
published draft rules and solicited public feedback for a
long-awaited "Bond Connect" programme intended to link China's
huge domestic bond market with overseas investors.
Under the draft rules published on the website of the China
Foreign Exchange Trade System (CFETS), foreign investors
targeting China's bond market under the connection would be
required to submit quotation requests of a minimum 1 million
CFETS said it would have the right to investigate investors
whose trading or information disclosure violate its rules or the
rules of China's interbank bond market.
"Abnormal" trading activities by investors, including
insider trading, market manipulation and frequently sending
quotations not reflecting "true trading intentions" could result
in investors' trading rights being suspended or revoked, the
draft rules said.
China's bond market was worth 66.9 trillion yuan, or about
$9.8 trillion, at the end of April, according to the People's
Bank of China (PBOC).
The "Bond Connect" programme has been planned in the wake of
a scheme launched in 2014 that allows two-way trading between
the Hong Kong and Shanghai stock markets. Bankers say it would
be a milestone in the opening of China's capital markets.
The draft rules only concern "Northbound" trade, or the
trading of Chinese bonds by foreign and Hong Kong investors.
In May, the Hong Kong Monetary Authority, the city's bond
market regulator, and the PBOC announced that the programme had
been formally approved, but that it would only feature
"Northbound" trade in its initial stage.
Regulators have not yet provided a timetable for when the
"Bond Connect" would begin operation.
($1 = 6.7983 Chinese yuan)
(Reporting by Andrew Galbraith; Editing by Richard Borsuk)