JPMorgan Chase announced that it had received the license to underwrite bond in Chinese corporate market. This license allows the American bank to issue a corporate bond in China’s emerging market.
In an announcement on Monday, Feb. 6, JPMorgan Chase said that the supervisory body of Chinese interbank bond market National Association of Financial Market Institutional Investors (NAFMII) has granted the license to JPMorgan. According to Reuters, the American bank is now able to trade corporate bonds issued by non-financial entities in China’s bond market.
As the debt financing instruments, corporate bonds are issued to raise financing for the issuing companies. Since there are many varieties of debt financing instruments classified as corporate bonds, therefore only the instruments which have been approved by NAFMII will be able to be traded in China’s bond market by JPMorgan Chase.
JPMorgan is the first among U.S. bank to be granted the license according to Bloomberg. With the 43.7 trillion yuan ($6.37 trillion) of the outstanding at the end of 2016, China is the third largest bond market in the world. Based on data from the China Central Depository & Clearing Co., its interbank note market accounting for over 90 percent in 2016.
The American lender has experienced many ups and downs in its China’s operation. Last year, it had to pay $264 million settlement for the bribery case in China as the federal prosecutors found that JPMorgan deployed selective hiring practices in China.
After three years of investigation, U.S. Securities and Exchange Commission found that JPMorgan hired children of Chinese leaders to win favor from the government in its business operation in China. The investigator also found that JPMorgan has a special program called Sons and Daughters program, designated to track the data of influential Chinese leaders and their children.
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