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Haikou Jiangdong New Area
Industry

China issues rules defining standard debt assets

July 06, 2020


Abstract : Chinese central bank announced last Friday that it promulgated, together with three other financial regulators, rules on defining standard debt assets of financial institutions, effective from August 3, reported Xinhua Finance, a financial news platform run by Xinhua News Agency.

BEIJING, July 6 (Xinhua) -- Chinese central bank announced last Friday that it promulgated, together with three other financial regulators, rules on defining standard debt assets of financial institutions, effective from August 3, reported Xinhua Finance, a financial news platform run by Xinhua News Agency.

The rules were mapped out in accordance with the guiding opinions on regulating and standardizing asset management (AM) business of financial institutions of China's central bank, banking and insurance, securities and foreign exchange regulators.

As an official of the Chinese central bank told media, the rules provide clear standard debt asset assessing procedures for various types of debt assets in a bid to improve the inclusiveness of bond market.

According to the rules, standard debt assets refer to fixed-income securities issued pursuant to relevant laws and regulations in China such as Treasury bond, central bank bill, local government bond, bond of government-backed institutions, financial bond, debt financing instruments of non-financial enterprises, bond of international institutions, interbank certificate of deposit, credit asset-backed securities, asset-backed papers and notes, bourse-traded asset-backed securities, and publicly-offered fixed-income securities-investing fund.

Other debt assets defined as standard debt assets should meet at the same time requirements on their properties of being tradable and equally dividable and on thorough information disclosure, collective registration and independent custody, fair pricing, optimized liquidity mechanism and being traded on interbank market and securities exchanges.

The rules highlighted that other debt assets newly added after releasing of the rules on July 3 can conduct standard debt asset assessment in accordance with relevant procedures and if defined as standard debt assets, they can be invested by AM products in the country to replace their existing non-standard debt assets.

What's more, other publicly-offered fixed-income AM products are not defined as standard debt assets in the rules given their notable differences with publicly-offered fixed-income securities-investing fund in terms of investment scope, information disclosure, and valuation standardization. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)

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Keyword: China standard debt asset

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