14 September 2021
On 14 September 2021, the People's Bank of China issued the "Notice on Establishing Southbound Trading under Mutual Bond Market Access (Southbound Bond Connect) between the Mainland and Hong Kong". Domestic investors that meet the requirements of the People's Bank of China can invest in bonds through the Southbound Bond Connect, and the target bonds are all bonds issued overseas and traded in the Hong Kong bond market. The counterparties are tentatively market makers designated by the Hong Kong Monetary Authority. The scope of domestic investors is tentatively designated as primary dealers for certain open market businesses approved by the People's Bank of China. Qualified Domestic Institutional Investors (QDII) and Renminbi Qualified Domestic Institutional Investors (RQDII) can also conduct offshore bond investments through the Southbound Bond Connect. The maximum net cross-boundary outflow for the Southbound Bond Connect shall not exceed the annual aggregate quota (currently equivalent to RMB 500 billion) and the daily quota (currently equivalent to RMB 20 billion). The notice will come into effect on 24 September 2021.