CCDC Removes Commitment Letter Requirement to Boost Foreign Bond Market Access

The Central National Debt Registration and Settlement Co., Ltd. (CCDC) has abolished the commitment-letter requirement for foreign institutions seeking to access China’s interbank bond market, effective immediately [1]. This move follows directives from the People’s Bank of China and is part of broader efforts to streamline foreign participation in the country’s financial system. Foreign central bank-like institutions will no longer need to submit commitment letters as part of the account-opening process, removing a prior bureaucratic hurdle that had previously delayed entry [2].

The adjustment is expected to simplify and expedite the investment process for foreign entities, making it easier for them to acquire Chinese government bonds and other instruments in the interbank market [1]. Analysts suggest that this change could enhance liquidity in China’s bond market and marginally increase foreign holdings, though the impact is likely to be gradual rather than immediate [1]. By reducing administrative barriers, the reform aligns with broader policy goals to improve market accessibility and internationalize China’s financial assets [2].

This step builds on previous easing measures aimed at encouraging foreign investment in China’s financial sector. While past reforms have led to a steady rise in foreign ownership of Chinese bonds, the removal of commitment letters is seen as a further signal of openness [1]. A financial analyst specializing in China’s economic policies described the move as an important step toward integrating foreign capital into the country’s growing financial market [1].

Experts also note that the policy shift could indicate a broader willingness to accommodate international investors, potentially influencing macroeconomic dynamics if capital inflows increase under these relaxed conditions [1]. However, immediate impacts on the market remain limited, and the long-term effects will depend on broader regulatory developments and global investor sentiment.

Source: [1]CCDC Abolishes Commitment Letter Requirement for Foreign Institutions (https://coinmarketcap.com/community/articles/6899bb91c4a7cb3a2ce85962/)