Swap Connect seen attracting new investors

Buzz about launch of northbound trading picks up; risk control in focus

The much-anticipated northbound trading of the Swap Connect is likely to start in the coming months as relevant rules were finalized — and it will facilitate the access of overseas investors to onshore interest rate swaps, experts said.

The connection mechanism marks another milestone in China's capital market opening-up, and is poised to help overseas investors better manage interest rate risks and attract more foreign investment into the onshore bond market, they said.

They commented after the People's Bank of China, the country's central bank, unveiled a set of interim rules on Friday about northbound trading of the Swap Connect, whereby overseas investors in the country's interbank bond market can participate in the trading of interbank financial derivatives.