The issuance of bonds by international development institutions (IDIs) in China’s interbank bond market is a milestone in the opening up of China’s bond market. IDIs enjoy numerous exemptions from domestic securities law as they hold sovereign credit of member states such as the exemptions from ordinary registration and reporting requirements. This briefing reviews the evolution of the rules governing the issuance of bonds by IDIs in China’s interbank bond market. The legal framework has shifted from strict substantive requirements to market self-regulation from strict foreign exchange controls to a much more relaxed regime and from the unilateral application of Chinese rules to the application of foreign rules where relevant.
China’s bond market has formed a basic structure of “Two...