Photo taken on Nov. 14, 2021 shows an exterior view of the office building of the Beijing Stock Exchange, in Beijing, capital of China.
BEIJING, Feb. 1 (Xinhua) -- Beijing Stock Exchange (BSE) issued on Monday detailed government bond transaction rules to improve market function and press ahead with its secondary government bond market construction, reported Xinhua Finance on Tuesday.
The Beijing bourse defined the scope of bonds eligible for trading, the depository and custody institution, qualified participants, transaction ways and others in the rules, effective as from Monday.
Year to date, BSE has made issuance service of local government bonds and Treasury bonds (T-bonds) a regular business since the issuance services for the two types of government bonds kicked off on July 29 and September 2 of last year. It served issuance of 1.14 trillion yuan of government bonds by January 30.
As BSE's announcement tells, it cooperates with China Central Depository & Clearing Co., Ltd. (CCDC) to provide government bond transaction settlement services and government bonds under custody with CCDC and other products of the type accepted by BSE are allowed to be traded on the exchange's transaction platform.
With no new market entrance threshold, BSE provides in the rules investors that have already opened bond accounts with CCDC are qualified for government bond trading on it and before participation in related trading, investors are required to apply to BSE for corresponding trading right.
In view of the properties of bond trading such as dominance of institutional investors, large sum of a single transaction, low trading frequency and transaction through negotiation, BSE launched in a prioritized manner negotiated transaction of cash bonds.
On each trading day, the trading time for bonds is between 9:00 and 12:00, 13:30 and 20:00. Investors are allowed to sell bonds on the same day of buying in cash bond trading. Real time gross settlement is applied in bond trading and investors are permitted to chose the settlement cycle. In cash bond trading, the settlement date can be T+0 day or T+1 day. For cash bond transactions declared between 16:50-20:00 of each trading day, their settlement dates are not allowed to be T+0 days.
Since effect-taking of the rules, BSE said qualified investors could start pursuant to requirements of the rules their internal preparations, apply for the trading right and participate in related testing.
In future, BSE will issue a circular to formally launch government bond trading when all related business and technical preparations are in place. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
A single purchase
