BEIJING, Jan. 26 (Xinhua) -- The People's Bank of China (PBOC) released on January 24 an opinion-inviting circular to further support foreign institutional investors to carry out bond repurchase agreement (repo) trading on interbank bond market, reported Xinhua Finance.
PBOC took the move to further deepen bond market opening-up and better facilitate liquidity management through bond repos for foreign institutions.
Recent years, China's broader bond market opening-up attracted more and more foreign institutional investors and their increasing bond investment in China spurred relatively great demand for related liquidity management through bond repos.
Open to a month-long opinion seeking from Wednesday, the circular contains 12 articles that mainly define the scope of foreign institutional investors, support alignment of related practices with regular international ones, provide obligations of foreign institutions, specify requirements over infrastructure services and industry self-discipline organizations, and stipulate supervisory and administrative punishment measures.
As the circular tells, foreign institutional investors eligible for repo trading on China's interbank bond market refer to those that have already conducted cash bond trading on the interbank bond market.
The circular requires positive repo parties among foreign institutional investors to complete transferring the target bonds in both pledged and outright bond repo transactions to facilitate the following treatment of the target bonds by the reverse repo parties.
The circular also requires financial market infrastructure concerned to strengthen services and monitoring as well and industry self-discipline organizations on interbank market to reinforce self-discipline management over related bond repo business. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
A single purchase
