China will improve the fund management rules for panda bonds in its latest step to progress the two-way opening-up of its financial market, according to a circular made public on Friday.

Panda bonds are yuan-denominated debts sold by overseas issuers in China.

The new regulations, which will come into effect on Jan. 1, 2023, facilitate the financing of overseas institutions in the domestic bond market, said the circular, jointly issued by the People's Bank of China and the State Administration of Foreign Exchange.

Management rules for panda bonds, including those related to fund registration, fund remittances and the opening of accounts, will be unified in China's interbank bond market and exchange-traded bond market, according to the notice.

Overseas institutional investors will also be allowed to conduct foreign exchange derivative transactions with qualified domestic financial institutions to manage their exchange rate risks.

The issuers can keep funds raised in China or remit them overseas, the notice said.

China's panda bond issuance registered stable growth in the first three quarters of 2022. Approximately 75.4 billion yuan (10.7 billion U.S. dollars) of such bonds were issued in the first nine months, up 8.7 percent from a year ago, official data shows. 

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