Hong Kong and Malaysian authorities have signed an agreement that will allow local investors to engage in cross-border debt securities settlement.

The so-called Pilot Platform created by the Hong Kong Monetary Authority, Bank Negara Malaysia and Euroclear Bank is expected to enhance cross-border debt securities settlement efficiency and strengthen the capacity for issuances in the Asian region. 

Through the programme, investors in Hong Kong and Malasyia may buy and hold foreign debt securities and settle transactions on a delivery-versus-payment basis. It also includes a database of Asian debt securities maintained by Euroclear Bank.

"This marks a major milestone for regional financial integration, and a step towards a unified bond market platform across Asia. As we expect ongoing growth of emerging East Asian markets, the implementation of the Pilot Platform would indeed be an important step toward sustaining growth in the region," commented Muhammad Ibrahim, deputy governor of Bank Negara Malaysia, in a joint statement issued by all participating entities.

The pilot platform commences on 30 March.