2024-02-29 23:10:00
◎Reporter Chang Peiqi
On February 29, the People’s Bank of China issued the “Notice on Matters Concerning Counter Business in the Inter-bank Bond Market” (hereinfollowing referred to as the “Notice”). The “Notice” clarifies the scope of counter investors and types of counter business, which is of great significance to promoting the high-quality development of the bond market.
Expand over-the-counter bond investment varieties
According to the relevant person in charge of the People’s Bank of China, the “Notice” further expands the types of over-the-counter bond investment and optimizes relevant institutional arrangements to facilitate bond investment by residents and other institutional investors, increase residents’ property income, and accelerate the development of the multi-level bond market.
Judging from the main content, the “Notice” clarifies the scope of counter investors, including individual investors, enterprises and financial institutions. At the same time, the over-the-counter business varieties and trading methods are clarified. The over-the-counter bond varieties include treasury bonds, local government bonds, financial bonds, corporate credit bonds and other inter-bank bond market bond varieties. Various types of bonds that have been traded and circulated in the inter-bank bond market are traded through over-the-counter investment and do not need to be approved by the issuer. Over-the-counter business operators and financial institutions have added bond lending and derivatives to their trading portfolio.
The “Notice” also optimizes the management rules for investor account opening. Foreign investors who are allowed to enter the inter-bank bond market can open bond accounts through counter business institutions and domestic custodian banks. In addition, the “Notice” clarifies the internal control management requirements for counter business establishments.
Li Huan, director of the infrastructure business line of ChinaBond Ratings, said that currently it is more common for investors to invest in government bonds through the counters of commercial banks, but they mainly invest in bonds issued through the counters. The “Notice” clarifies that bond types that have been traded in the inter-bank bond market can be traded over the counter, which means the consolidation and expansion of the secondary market for government bonds.
“Commercial banks have invested heavily in government bonds, especially local government bonds in recent years. The implementation of this policy can release part of the bank’s liquidity, while easing the financial pressure on banks, and also provide more financing for small, medium and micro enterprises. financial support.” Li Huan said.
Expand investment channels for residents
Promote the development of multi-level bond markets
The issuance of the “Notice” is of great significance in promoting the high-quality development of the bond market. The relevant person in charge of the People’s Bank of China stated:
First, the over-the-counter bond business is conducive to broadening residents’ investment channels. At present, the scale of government bonds directly held by Chinese residents is small, and compared with the mature bond market, there is still much room for improvement. Investing in the bond market through over-the-counter channels can efficiently convert savings into bond investments and increase residents’ property income.
Second, it is conducive to optimizing the financing structure. As of the end of 2023, the balance of my country’s bond market is 158 trillion yuan, making it the second largest bond market in the world. Accelerating the development of over-the-counter bond business will help promote the development of direct financing and optimize the structure of the financial system.
Third, it is conducive to the development of multi-level bond markets. Over-the-counter bond business is an extension of the inter-bank bond market to retail finance and inclusive finance. Compared with centralized and unified financial infrastructure, counter-operated institutions can provide various types of investors with flexible and diversified comprehensive services such as bond custody, market making, collateral management, clearing and settlement integration, etc., to enhance market activity and promote Market stratification.
(Editor: Sun Dan)
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