Chinese internet giant Tencent has launched an online platform for over-the-counter bond transactions, hoping to capitalise on the vast number of investors that already make use of the company’s messaging service for trading purposes.
Bloomberg reports that Tencent worked on the QTrade service for nearly two years in partnership with fintech startup Shenzhen Pingguo Shuju Keji Ltd, prior to its official launch on Friday.
The QTrade service facilitates Chinese bond transactions by first verifying the identities of participants, before providing them with an online platform to meet each other and engage in price negotiations.
The platform retains logs of the conversations and transactions of traders for at least five years, in order to satisfy the requirements of China’s securities regulators.
Over 70% of bond transactions are already conducted via personal messaging systems such as Tencent’s QQ platform, according to estimates provided by QTrade.
The China Securities Regulatory Commission has recently stepped up its scrutiny of online bond trading, however, with a ban on the use of individual email and messaging accounts for the placement of orders launched at the end of last year.
Fiona Liu, co-founder of QTrade, said to Bloomberg that the service would ensure that trading activity is safe and conduced in compliance with securities regulations.
QTrade will allow users of QQ, which has over 800 million active participants, to import their contact lists into the system.
Once investors meet and negotiate deals via the platform, the transactions will be processed via the official China Foreign Exchange Trade System
Tencent said in an official statement that the platform will capitalise upon the company’s messaging, big data and machine learning capabilities, as well as reduce risk via compliance with regulatory requirements.
