Former Hong Kong stock exchange boss Charles Li joins US-listed bond trading platform MarketAxess as non-executive director

·4-min read

Charles Li Xiaojia, the former chief executive of Hong Kong Exchanges and Clearing (HKEX), has joined US-listed debt trading platform MarketAxess as a non-executive director.

It is his first corporate role since leaving the operator of Asia’s third-largest stock exchange in December.

Working from Hong Kong, Li will join the board to advise the Nasdaq-listed electronic fixed-income trading platform that is expanding rapidly across Asia. The company, based in New York, announced on Monday afternoon that he had started his new role on July 13.

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“I have a strong interest in market infrastructure companies. Joining the MarketAxess board will allow me to continue to learn and to further contribute to the buildout of electronic marketplaces for global fixed-income trading,” Li said in a Zoom interview on Monday.

Li, who turned 60 in March, had indicated he would stay in Hong Kong, the city he has called home for the last three decades, and hinted he would set up his own business. Since leaving HKEX at the end of last year, he said he has been busy setting up a platform to be launched later this year to help small companies to raise funds. He has also been playing football every day.

The appointment comes as Beijing is expected to soon announce the launch of the so-called southbound leg of the Bond Connect scheme which will allow mainlanders to invest in international bonds via Hong Kong. In 2017, when Li was at the helm of HKEX, he introduced the “northbound” leg allowing international investors to access mainland China’s bond market via Hong Kong.

About 2,600 global institutional investors have been approved to use the northbound channel to access China’s US$16 trillion bond market, which had a daily average turnover of 28.1 billion yuan (US$4.4 billion) in May, according to HKEX data.

“Ever since my involvement with the launch of Bond Connect, I have closely followed the development of the leading global fixed-income trading platforms, such as MarketAxess, and believe that they will play important roles in the internationalisation of the Asian bond markets,” Li said.

MarketAxess chairman and chief executive Rick McVey said in a statement that Li’s “knowledge of market structure in Asia would be invaluable to MarketAxess as we expand our investment in the region.”

International bonds issued in Asia have increased more than fivefold from US$107 billion in 2006 to US$575 billion in 2020, according to data from the International Capital Market Association. China is driving the growth: the average number of international bonds issued from China increased from 20 deals per year during the 2000s to nearly 600 deals in 2020, the association’s data showed.

“MarketAxess has created a unique, centralised global electronic marketplace that continues to expand internationally. The Asia region is growing rapidly, and it is a great time for me to join a global leader in fixed-income electronic trading,” Li said. “It is indeed a trend for major publicly-listed corporates to raise funds in the bond markets as they diversify their channels of funding.”

McVey and Li had both worked at US lender JPMorgan Chase, but at different times. McVey joined in 1991 in the US and stayed until he founded MarketAxess in April 2000 with backing from the bank and other investors. The company now has over 1,800 international asset managers and institutional investors trading fixed-income products globally.

Headquartered in New York, Market Axess has a number of international offices in cities such as London, Hong Kong, Singapore and Sao Paulo.

Li, who started his career aged 16 in the oilfields of north-eastern China before studying in the US to become a lawyer, was China chairman of JPMorgan Chase from 2003 to 2009. He landed Hong Kong’s highest-paid financial regulation job at the HKEX in 2010.

He took home HK$120.49 million (US$15.55 million) in salary, bonus and share awards last year. Li was replaced by another former JPMorgan banker, Nicolas Aguzin in May.

The exchange’s market capitalisation has almost tripled since Li took over in January 2010 to HK$47.5 trillion (US$6.13 trillion) at the end of last year, and Hong Kong has been the world’s largest hub for initial public offerings (IPOs) in seven of the past 12 years. He also introduced the Stock Connect scheme for cross-border trading of shares between Hong Kong and Shanghai in 2014, adding the Shenzhen leg two years later.

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