Exclusive interview with ICMA Asia-Pacific Senior Director Zhang Shunrong: Bridging three major differences is necessary for opening cross-border repurchase agreements; Chinese financial institutions should enhance their participation and influence in international rules.

Ask AI · Cross-border repurchase open, how do differences in transaction nature affect international investors?

Cailian Press, April 2nd (Reporter Li Ting, Gao Ping) The Chinese interbank repurchase market is opening its doors to international investors, marking a new depth in China’s bond market opening to the outside world. As the manager of the globally accepted repurchase master agreement (GMRA), the International Capital Market Association (ICMA) has played a key role in this opening.

On March 31st, at the ICMA China Debt Capital Market 2026 Annual Conference, ICMA Asia-Pacific Senior Director Zhang Shunrong stated in an exclusive interview with Cailian Press that respecting international practices in opening is an important step, but foreign institutions still need to face “compatibility” issues in transaction essence, legal linkage, and market understanding during actual operations.

Additionally, he shared his insights on convergence of green finance standards, exploration of green repurchase, and how China can enhance its voice in international rule-making.

Cailian Press: GMRA has been recognized in cross-border repurchase transactions in China’s interbank bond market, meaning foreign investors can enter the market based on their existing or newly signed GMRA agreements. From ICMA’s perspective, how have foreign institutions responded to this policy after its implementation?

Zhang Shunrong: We are very honored to contribute to this. In September 2025, Chinese regulators jointly announced the opening of the interbank repurchase market to international investors, reflecting respect for international practices. We completed filing in October that year and officially implemented it in January 2026, allowing onshore market makers and offshore institutions to use GMRA and ICMA’s supporting rules for cross-border repurchase transactions. The market responded positively, viewing this as an important step towards aligning China’s financial market with international standards.

Cailian Press: ICMA has pointed out that China’s repurchase market has its own characteristics. In your view, what operational compatibility issues might foreign institutions encounter when using GMRA to participate in China’s interbank bond repurchase market?

Zhang Shunrong: Compatibility issues mainly manifest in three dimensions.

First, the difference in transaction nature. Internationally, repurchase is “buyout,” involving transfer of bond ownership; whereas in China’s domestic market, the mainstream is still “pledge-style” repurchase that does not transfer ownership. From an international perspective, the latter is closer to collateral financing, which fundamentally differs from the “buyout” logic underlying GMRA.

Second, challenges in cross-border legal linkage. GMRA is governed by UK law. When counterparties are spread across different jurisdictions, a key issue is whether Chinese market makers have obtained legal opinions on the enforceability of the agreement in the counterparty’s jurisdiction.

Third, market understanding and technical linkage. This includes operational details like settlement timing. We have maintained close communication with Chinese regulators and financial infrastructure institutions to ensure seamless technical integration. The bigger challenge is to deepen the understanding and adaptation of international rules among a broader group of Chinese market makers.

Cailian Press: Green finance is another focus. ICMA’s “Green Bond Principles” are an important benchmark in the global green finance market. Against the backdrop of the continuous expansion of China’s green bond market, how do you view the convergence of China’s practices in external assessment of green bonds, use of raised funds disclosure, and international standards?

Zhang Shunrong: In fact, with the release of China’s version of the Green Bond Principles and updates to the green bond project catalog, China’s standards now fully align with international expectations. Therefore, China’s green bond market itself is no different from the international market, which also demonstrates the international recognition of China’s “dual carbon” commitments.

However, you pointed out a key issue: post-issuance disclosure. Currently, many Chinese issuers still have deficiencies in the content and frequency of post-issuance information disclosure. Strengthening post-issuance disclosure is a key area for future efforts.

Cailian Press: As the scale of green bonds grows, their potential as collateral for repurchase agreements has attracted attention. Does ICMA’s best practice guide for repurchase markets consider including content related to green assets?

Zhang Shunrong: We have initiated relevant work, especially integrating green finance efforts with traditional repurchase practices, exploring the definition of “green repurchase.” This may involve multiple dimensions: ensuring funds are used for green projects, setting green requirements for transaction parties, or establishing green standards for underlying assets. Currently, experimental green repurchase transactions have already appeared in the market. We hope to reach a consensus among members and develop more systematic, traceable market rules in the future.

Cailian Press: You have personally experienced several key milestones in China’s bond market opening. Looking back, what do you think is the most effective way to promote the interaction between international standards and China’s market practices? What advice do you have for Chinese institutions wishing to participate more deeply in international rule-making?

Zhang Shunrong: I have two deep insights.

First, the value of “bridge” roles. From “Stock Connect,” “Bond Connect,” to now “Repo Connect,” ICMA has played an active bridging role in introducing international rule systems and helping China’s market learn from mature experiences.

Second, green finance is a successful example of the integration of international rules and Chinese practices. Faced with the common challenge of global warming, China’s “dual carbon” goals have led it to actively adopt and incorporate international standards like those from ICMA, promoting convergence.

My advice to Chinese institutions is: China’s bond market’s international influence has yet to fully match its status as the world’s second-largest economy. This requires more Chinese market institutions to actively join international platforms like ICMA, speak out more proactively, and gain influence in rule-setting, thereby enhancing China’s participation and influence in international standards. This is my personal vision and an inevitable direction for market development.

(Cailian Press, Li Ting, Gao Ping)