CFETS Joins the ESG Train

The China Foreign Exchange Trading System (CFETS) and post-trade provider Clearstream have entered an infrastructure cooperation to enable Chinese market participants to trade ESG (environmental, social, governance)-eligible triparty repo bonds.

The repo transactions are facilitated by CFETS’s bond and FX trading platform in mainland China, while Clearstream acts as triparty repo agent, streamlining collateral management, settlement and custody.

The first trades were successfully performed by China Construction Bank, China Merchants Bank, Crédit Agricole CIB, Industrial and Commercial Bank of China and Shanghai Pudong Development Bank. All participants chose all eligible ESG bonds based on dedicated baskets provided by Clearstream. The firms say that by leveraging triparty repo bonds, investors will benefit from diversified sources of funding, combined with a high degree of safety as well as outsourced collateral management and administrative functions.

“It’s at the heart of Clearstream’s mission to support investors around the globe who are seeking to include environmental, social, and governance aspects in their investment decisions,” says Philip Brown, CEO of Clearstream Banking. “The cooperation aligns perfectly with this goal. We are excited, together with our renowned partners, to provide innovative, stable and internationally connected financial infrastructure to the largest market in Asia.”