China’s Bond Connect set to remove trading obstacles

Launch of delivery versus payment and block allocation should stimulate onshore hedging as well

Breaking out: a key concern is whether Bond Connect can handle a sudden influx of money and participants

Operational improvements to Bond Connect – the initiative allowing foreign investors to access mainland Chinese bond markets through Hong Kong – are likely to boost real-money flows into the world’s third-largest fixed-income market, according to industry participants.

One of the two designated domestic custodians for Bond Connect – the China Central Depository & Clearing Company (CCDC) – has yet to introduce a delivery versus payment (DVP) settlement system, but market participants say the