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 Position :  Home >>   Corporate Banking>> Wealth Management>> Agent Settlement Services For Bonds  
 

 

Agent Clearance Services For Bonds

Definition

Agent bond settlement refers to an appointment accepted by BOCOM from applicants (financial body corporate and non-financial body corporate), authorizing the bank to handle their business activities including the opening and cancellation of bond custody accounts, bond transaction and settlement as well as payment of bond interest and principal.

Authorized transactions refer to the search for transaction opportunities carried out by BOCOM according to the content of instruction from the trustee. Authorized settlement refers to a settlement instruction from the trustee after completion of a bond transaction between the trustee itself and its counterpart in the nation-wide inter-bank bond market. Financial body corporate can choose between the two transaction modes of authorized transaction and authorized settlement. Non-financial body corporate can only opt for authorized transactions.

Categories of Bonds

RMB bonds approved by the People’s Bank of China for inter-bank trading, include treasury bonds, policy-related bank bonds, financial corporate bonds, central bank bonds and other bonds.

Salient Features

(1)       Provision of indirect opportunities for non-financial body corporate to enter the nation-wide inter-bank bond market, thereby diversifying the channels for investment

(2)       Provision of professional services in bond portfolio management

(3)       Provision of different authoritative news updates and analysis of the bond market in a timely manner

(4)       Provision of services including bond custody, transaction settlement, interest and principal payment, and account -balance inquiries

Application procedure

(1)       Trustee submits written application for trust services to the local BOCOM branch, along with relevant documents required by the bank;

(2)       Upon approval by BOCOM’s headquarters, a bond settlement agency agreement in triplicate will be signed with the trustee, who will be forbidden from signing trust service agreements with other banks throughout the effective period of the agreement;

(3)       Trustee signs a bond buy-back agreement in triplicate;

(4)       Trustee opens a fund settlement account at BOCOM;

(5)       On behalf of trustee, BOCOM opens a C-type bond custody account with China Government Securities Depository Trust & Clearing Co. Ltd and delivers the “notification for account-opening” issued by China Government Securities Depository Trust & Clearing Co. Ltd. to trustee;

(6)       Trustee sends transaction instruction and settlement instruction to the local BOCOM branch, which will then transmit the documents to BOCOM headquarters

(7)       BOCOM headquarters reverts back to local BOCOM branch with the outcome of the processing of agency activities, and this will, in turn, be relayed to the trustee by the branch office.



 



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