People’s Bank of China and Hong Kong Monetary Authority ‘s Cooperation for Southbound Trading Close

King & Wood Mallesons has been the legal counsel to the China Foreign Exchange Trade System (National Interbank Funding Center) for the implementation of Southbound Trading.

On September 15, 2021, the People’s Bank of China (PBOC) and Hong Kong Monetary Authority (HKMA) jointly announced that the cooperation in southbound bond market access between Mainland China and Hong Kong (“Southbound Trading”) will officially launch on September 24, 2021. Under Southbound Trading, Mainland institutional investors may invest in bonds traded in the Hong Kong bond market through mutual access arrangements between the financial infrastructures in Mainland China and Hong Kong regarding bond trading, custody, settlement, etc. Southbound Trading marks another important initiative of the Central Government to support the continued development of Hong Kong and enhanced cooperation between the Mainland and Hong Kong. It is conducive to the diversification of investment access channels for Mainland institutional investors, to the steady and progressive two-way opening up of the Mainland financial markets, to the enhancement of Hong Kong’s competitive advantages and reinforcement of Hong Kong’s status as an international financial centre for its long-term and sustained prosperity and stability.

People’s Bank of China  is the central bank of the People’s Republic of China responsible for carrying out monetary policy and regulation of financial institutions in mainland China, as determined by People’s Bank Law and Commercial Bank Law. 

Hong Kong Monetary Authority (HKMA) is Hong Kong’s central banking institution. 

 China Foreign Exchange Trade System (National Interbank Funding Center) also known as the National Interbank Funding Center, is a sub-institution directly affiliated to the People’s Bank of China (PBC).

KWM provided full-cycle, all-around and high-quality legal services to CFETS in this project with a team led by Molly Su (Picture) from the Shanghai office, and the lead partner for Hong Kong law is Minny Siu from the Hong Kong office. The team members for this project are Xi Suodi and Zhao Zhenan from the Shanghai office.

Involved fees earner: Zhen Zhao – King & Wood Mallesons; Su Meng – King & Wood Mallesons; Minny Siu – King & Wood Mallesons; Suodi Xi – King & Wood Mallesons;

Law Firms: King & Wood Mallesons;

Clients: China Foreign Exchange Trade System ;

Author: Sonia Carcano