JP Morgan says it is the first US bank to be approved to underwrite corporate bonds in China's interbank bond market.
The licence, issued by the National Association of Financial Market Institutional Investors, allows the bank to underwrite debt financing instruments issued by non-financial entities.
“As [China's] capital markets continue to develop with increasing international participation and transparency, the licence will further enhance our ability to serve our clients,” said David Li, chairman and chief executive of JP Morgan China.
Worth the equivalent of $6.4 trillion, China's bond market is believed to be the third largest in the world after those of the US and Japan, according to China Central Depository & Clearing. The interbank market is believed to account for more than 90% of the market's overall value.
The Chinese authorities have recently taken steps to open up its bond market to foreigners, for instance by removing quotas for foreign institutional investors in February 2016.
The National Association of Financial Market Institutional Investors, which issued JP Morgan's licence, is a self-regulatory body accountable to the Chinese central bank.
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