China to let private investment funds trade interbank debt market

SHANGHAI: China will allow private investment funds to trade in the country's interbank debt market for the first time, a central bank document dated June 15 and obtained by Reuters on Tuesday said.

The People's Bank of China (PBOC) did not immediately respond to requests for comment.

Managers of private investment funds who have net capital of more than 10 million yuan ($1.61 million) can apply for the license, the document showed. Once approved, they can trade fixed income products, including government and corporate bonds.

The move "is aimed at further enriching the variety of investment groups in the interbank market, building multi-level market mechanisms and making the market better serve the real economy," the PBOC said in the document.

China's private investment funds have so far been allowed to trade in the Shanghai and Shenzhen Stock Exchanges and have been mostly focused on stocks.

By the end of March, China had 9,031 private investment funds, managing more than 10,000 products, with total assets under management exceeding 2 trillion yuan, according to data published by Asset Management Association of China.

China's interbank market is eligible only to institutional investors. The PBOC has been expanding access to the interbank market as part of Beijing's moves to gradually internationalise its financial markets.

Last November, for instance, it permitted rural commercial banks and cooperatives, trusts and asset management affiliates of securities brokerages to trade in the interbank debt market for the first time.