Published On: Wed, Jun 18th, 2014

London Stock Exchange Group Signs MoU With Bank Of China

London Stock Exchange Group (LSEG) on 17 June signed a memorandum of understanding (MoU) with Bank of China (BoC). The agreement, signed by LSEG Chairman, Chris Gibson-Smith and BoC Chairman, Tian Guoli, will see the two organisations form a strategic partnership and work closely together to expand each company’s access to UK, European and Chinese markets as well as promoting the development of the offshore RMB market in the UK.

The signing ceremony, held at LSEG’s Paternoster Square headquarters coincided with the UK visit of Chinese Premier Li Keqiang and will help strengthen the fast-growing financial ties between London and China.

The MoU outlines several areas for closer collaboration with a particular focus on developing a joint strategy to promote the offshore RMB market in the UK. BoC and LSEG intend to jointly assess and design RMB clearing and financing processes for future RMB denominated products. Within this framework, BoC will work towards becoming a London Stock Exchange member in addition to its LCH.Clearnet clearing membership, allowing the bank to support new RMB product development in London.

Chris Gibson-Smith, Chairman, LSEG said: “London is the world’s most international financial market and a natural partner to China in its ambitious global development. We are fully committed to supporting Bank of China’s work in developing the off-shore RMB market in London. Clearing and equity are the cornerstones for the successful expansion of a truly international market for Chinese companies and financial products. Our agreement today will significantly accelerate the writing of this important new chapter in the story of global finance.”

Tian Guoli, Chairman of Bank of China Limited Group said: “Bank of China was the first Chinese bank to open an office in London and this year celebrates 85 years of continuous operations in the City during which time we have established ourselves as London’s market leader for RMB products and services. We are now delighted to formalise our longstanding partnership with London Stock Exchange Group which brings together two world class organisations and represents the next phase in the development of London as the key offshore RMB hub. The innovations which will result from the partnership will provide issuers and investors alike with unparalleled cross border access to the Chinese and UK markets.”

LSEG has a strong track record of supporting Chinese equity and debt issuance on its markets. 59 Chinese companies are quoted in London – 7 on the Main Market and 52 on AIM. In addition, there are 19 so-called dim sum bonds on London Stock Exchange’s markets, with an aggregate value of RMB 14 billion. This year, IFC, part of the World Bank Group and Bank of China issued bonds of RMB 2 billion and RMB 2.5 billion respectively.

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