ICBC to Lead Trials for Over-the-counter Sales of Local Government Bonds


China’s biggest bank is set to debut over-the-counter sales of local government bonds.

According to the Ministry of Finance (MOF) a total of six Chinese administrative units including Ningbo, Zhejiang, Sichuan, Shaanxi, Shandong and Beijing will participate in the first round of trials for the over-the-counter sale of local government bonds during the period from 25 March to 3 April 2019.

As the biggest market maker on the Chinese bond market, state-owned giant ICBC will serve as the leading participant in the trial.

An executive from ICBC said that investors will be able to subscribe for the bonds via ICBC’s banking outlets as well as its electronic banking channels, the latter of which will provide uninterrupted 24-hour sales services on working days throughout the course of the trial.

ICBC participated in the first trials for bank handling of over-the-counter bond operations in 2002, as well as led the exclusive issuance of the first bonds offered by China Development Bank and Exim Bank in China in 2014.

MOF expects over-the-counter sale of local government bonds to help satisfy the investment needs of clients with low-risk preferences, provide investors with a greater range of investment choices, as well as help to expand channels for the issuance of local government bonds.

MOF said that over-the-counter sale of local government bonds is an “important measure for finance serving the real economy, the prevention of financial risk and the deepening of financial reforms.”