China c.bank widens access to OTC bond products

SHANGHAI, March 28 Fri Mar 28, 2014 7:01am EDT

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SHANGHAI, March 28 (Reuters) - China will increase the range of bond products that the country's commercial banks are able to offer as it looks to diversify investment options for private investors, the People's Bank of China (PBOC) said on Friday.

The country's leaders are encouraging greater private investment, promising greater transparency from the country's re-started initial public offering (IPO) market and increasing the range of financial products available to investors, as it looks to reduce company reliance on bank loans for funding.

China's commercial banks will be able to offer a wider range of "over the counter" bond products to investors, increasing the range from products backed by treasury bonds to those built on government-backed debt from institutions such as the China Development Bank and China Railway Corporation, according to a statement posted on the central bank's official website.

Under the new regulations, which take immediate effect, commercial banks will also be able to sell bond products through a wider range of channels, including online platforms and at branch outlets. They will, however, need to first undergo tests from bond registration regulators.

The central bank said all bond products would need to strictly comply with regulations and that China's national interbank funding centre and the national clearing institution would strengthen market supervision and make regular reports back to the PBOC with bond market analysis. (Reporting by Adam Jourdan; Editing by Jacqueline Wong)

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