Enabling HKCC and SEOCH to accept CGBs as non-cash collateral for margin requirements.
Eligible collateral includes offshore bonds issued by CHI GVT (MOF bonds) and domestic bonds issued by the CHI GVT or policy banks and traded through Bond Connect.
CGB collateral is subject to the existing 50% non-cash collateral limit, concentration limits of CNY 282mn for MOF bonds and CNY 1bn for each Bond Connect securities issuer category, and applicable haircuts.
MOF bonds may be used for house and client position accounts, while Bond Connect Securities are restricted to house accounts and specified segregated client accounts.
The accommodation fee for non-cash collateral will decrease from 0.25% to 0.15% per annum, effective Nov 2, 2026.
Clearing participants must complete the required onboarding arrangements before posting CGB collateral.
The circulars are effective from Nov. 2, 2026.
On Jul. 7, CHI CB announced the launch of Hong Kong FIC trading platform.
CHI CB, HK SFC, HKMA issued a joint announcement welcoming collaboration between CHI CFETS and HKEX to develop an electronic fixed income and currency trading platform (FIC Trading Platform) in Hong Kong.
They also announced measures covering six FIC market initiatives and five offshore RMB market measures.
CHI CB Governor Pan Gongshengattended the Hong Kong FIC & Bond Connect Summit.
Follows HK GVT Feb. 2026 Financial Secretary delivered Budget speech, see #287834.
Key Initiatives
Onshore China Government Bonds (CGBs) and policy bank bonds under Northbound Bond Connect accepted as HKEX clearing house collateral targeted for end-2026.
Launch of HKEX 5-Year China Government Bond Futures in Hong Kong on Aug. 3 (#302895).
Southbound Bond Connect annual quota raised from RMB 500bn to RMB 800bn with expanded product scope to cover HKD and RMB bond-linked products and Macao bond market connectivity.
HK SFC entered discussions with CHI CB to include the interbank seven-day fixing depositary institutions repo rate (FDR007) as a reference rate planned for Q4 2026.
HKMA RMB Business Facility (#240011) quota increased from RMB 200bn to RMB 500bn, with new tenors of 9-month, 2-year, and 3-year, effective Jul. 10, 2026.
HKMA also explored a 7-day offshore RMB liquidity tendering mechanism and issuance of offshore RMB short-term debt instruments to support the offshore RMB yield curve.
HKEX-CIPS MOU
HKEX and Cross-border Interbank Payment System (CIPS) signed a memorandum of understanding to explore cross-border RMB cooperation, with OTC Clearing Hong Kong Limited (OTC Clear) intending to apply as a direct CIPS participant before end-2026.
HKEX also welcomed FIC initiatives announced at the Summit including an RMB-denominated Gold Futures contract with physical delivery support from Shanghai Gold Exchange.
Aug. 2026 HKEX Non-Cash Collateral Briefing
On Aug. 27, 2026, HKEX said it will hold September briefing sessions for clearing participants on accepting CGBs as non-cash collateral.
The enhancement targets a Q4 2026 launch, subject to regulatory approval, expanding on the CGB collateral initiative noted above.
HKEX also intends to accept offshore-issued bonds of China's Ministry of Finance (MOF) as non-cash collateral, subject to regulatory approval.
Sep. 2026 HKEX Accepts Bonds as Non-Cash Collateral
On Sep. 25, 2026, HKEX announced that its clearing houses will begin accepting CGBs, policy bank bonds, and offshore bonds issued by CHI GVT as eligible non-cash collateral.
Further details, including relevant operational arrangements and eligibility requirements, will be provided in a separate circular and published in due course.
Clearing Participants are encouraged to review the briefing materials set out in the attachment and commence any necessary operational preparations.
Target implementation date is in Nov. 2026, subject to regulatory approval.
Enabling HKCC and SEOCH to accept CGBs as non-cash collateral for margin requirements.
Eligible collateral includes offshore bonds issued by CHI GVT (MOF bonds) and domestic bonds issued by the CHI GVT or policy banks and traded through Bond Connect.
CGB collateral is subject to the existing 50% non-cash collateral limit, concentration limits of CNY 282mn for MOF bonds and CNY 1bn for each Bond Connect securities issuer category, and applicable haircuts.
MOF bonds may be used for house and client position accounts, while Bond Connect Securities are restricted to house accounts and specified segregated client accounts.
The accommodation fee for non-cash collateral will decrease from 0.25% to 0.15% per annum, effective Nov 2, 2026.
Clearing participants must complete the required onboarding arrangements before posting CGB collateral.
