HSBC Launches Collaboration with Clearstream, Tapping into Chinese Bond Market

HSBC (NYSE:HSBC) has embarked on a strategic partnership with Clearstream, a provider of post-trade services for financial services participants, helping enable clients to access China’s Interbank Bond Market (CIBM), according to an HSBC statement.

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The Chinese bond market presently is the third largest in the world ($6.8 trillion as of Q2 2015). For its part, the CIBM scheme helps forge a new avenue for international investors to access onshore bonds, which complements existing QFII and RQFII schemes as well as those traded in Hong Kong.

The new partnership caters to customers of the international central securities depository (ICSD), with regard to improved and expanded access to CIBM. HSBC already has forged a niche as a key player in supporting multiple fixed income and bond capabilities for foreign and domestic investors in China. The lender also acts in the capacity of onshore bond Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term agent for Clearstream’s overseas institutional investor customers.

Through this function, the group also helps provide trading Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term, settlement and custody services in CIBM. The partnership is important as it will help institutional investors link into one of the world’s largest bond markets, thereby helping satisfy a demand in the region.

According to Philip Brown, Co-Chief Executive Officer of Clearstream Banking S.A., in a recent statement on the partnership: “We are delighted to partner with HSBC to become the first international central securities depository to offer global investors access to China's Interbank Bond Market.”

“This development coincides with an important milestone, i.e. the inclusion of the RMB into IMF's SDR currency basket, which is expected to boost investors' demand for what is already the third largest bond market in the world. This also represents our focus on Asia and will enable us to offer our clients an attractive and efficient solution to build and further develop their exposure to China's onshore bond market,” he added.

“A deep and liquid domestic bond market is a key stepping stone to achieving China’s ambition of making the RMB a truly global currency. Partnering with Clearstream places us in an excellent position to help foreign institutional investors tap into opportunities in the world’s third largest bond market, where approximately RMB54 trillion is currently traded interbank,” explained Ian Banks, Head of HSBC Securities Services for Asia-Pacific, in an accompanying statement.