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By Dai Qi

China has released new rules to standardize the bond issuance by overseas institutions on the country's interbank bond market.

The new rules, released by the People's Bank of China and the Ministry of Finance jointly on Tuesday, clearly put forward not only the qualifications for overseas institutions to issue bonds on China's interbank bond market but also the procedures for application and registration, information disclosure, entrustment and settlement, the opening of RMB accounts, as well as investor protection.

China's central bank said the move aims at improving related mechanisms and open up the country's bond market further to the outside world.

The new rules diversify the requirements for different types of issuance institutions.

For example, overseas governments and international development institutions with issuance experience and the abilities to pay their debts should apply and register with the National Association of Financial Market Institutional Investors before issuing bonds. 

Overseas financial institutions should get permission from China's central bank and have paid-in capital of at least 10 billion yuan (about 1.5 billion U.S. dollars) or its equivalent. Those institutions should also have a stable financial status and have made profits for the past three consecutive years.

China began to allow overseas institutions to issue RMB bonds on the interbank bond market in 2005 when international development institutions became the first beneficiaries. 

Currently, the types of overseas institutions that can issue bonds in China have been expanding continuously. Foreign governments, overseas financial institutions and non-financial enterprises can all get their chance.

By the end of August, overseas institutions had issued bonds worth about 178.2 billion yuan (about 25.9 billion U.S. dollars) accumulatively on China's interbank market. 

As the new rules take effect, previous rules on bond issuance of international development institutions which had existed for eight years will be abolished.