Regulatory Alerts2021-03-05
Added · Updated
Enhanced Currency Conversion Arrangement Involving Onshore RMB (CNY) under Northbound Bond Connect
The Hong Kong Monetary Authority issued this circular to provide guidance for Hong Kong FX Settlement Banks on implementing the Enhanced CNY Conversion Service for Northbound Bond Connect investors. The framework allows eligible investors to appoint up to three settlement banks for currency conversion and hedging, subject to strict internal controls ensuring transactions arise from genuine investment needs and funds are ring-fenced. Banks must report investor-level data to the HKMA and the Trade Repository, while monitoring discrepancies between converted funds and bond settlement amounts to maintain access to the onshore interbank foreign exchange market.
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