On February 17, 2016, the People's Bank of China (“PBOC”) issued Announcement [2016] No. 3 to push forward the opening of the Chinese interbank bond market and facilitate investment in this market for eligible foreign institutional investors, by relaxing access formalities and quantitative restrictions.

Under the Announcement, foreign financial institutions registered outside the territory of Mainland China2 in compliance with the relevant law and regulations (e.g., commercial banks, insurance companies, securities companies and fund management companies) and other medium and long-term institutional investors (e.g., pension funds, charitable funds and endowment funds) recognized by the PBOC may invest in the interbank bond market if they are legally incorporated in their countries of origin, have sound corporate governance systems, the source of their funds is legal and have implemented risk control.

The PBOC encourages medium and long-term institutional investment without any quota limits, by implementing prudent, macroeconomic management. Foreign investors must first complete record-filing of the investment and account activation formalities with the PBOC’s headquarter in Shanghai, and appoint inter-bank market settlement agents, whose duties are further regulated under the Announcement.

Date of issue: February 17, 2016. Effective date: February 17, 2016