Measures for the Administration of Bond Transactions in the National Inter-Bank Bond Market
Measures for the Administration of Bond Transactions in the National Inter-Bank Bond Market
Measures for the Administration of Bond Transactions in the National Inter-Bank Bond Market
Order of the People's Bank of China [2000] No. 2
April 30, 2000
In order to propel the further development of the national inter-bank bond market, regulate bond transactions, prevent market risks, and protect the lawful rights and interests of each party to the transaction, the People's Bank of China has formulated the "Measures for the Administration of Bond Transactions in the National Inter-Bank Bond Market", which are hereby promulgated for implementation.
President Dai Xianglong
Chapter I General Provisions
Article 1 The present Measures are formulated in accordance with the relevant laws and regulations of the state for the purpose of regulating bond transactions in the national inter-bank bond market, preventing transaction risks, maintaining the lawful rights and interests of each party to the transaction, and promoting the healthy development of the national inter-bank bond market.
Article 2 Bond transactions in the national inter-bank bond market (hereinafter referred to as bond transactions) as mentioned in the present Measures shall refer to the bond transactions made by means of price inquiry between institutional investors mainly composed of commercial banks and other financial institutions.
Article 3 There are two varieties of bond transactions, namely, repurchase and transaction in cash.
Repurchase is a kind of short-term financing business which is carried out by both parties to the transaction by way of pledging the bonds. Specifically, it is a financing activity in which, when the funds receiver (the obverse repurchasing party) receives the funds by pledging the bonds to the funds provider (the reverse repurchasing party), and both parties agree that, on a certain date in the future, the obverse repurchasing party shall refund the funds to the reverse repurchasing party at the amount calculated on the basis of the stipulated interest for the repurchase, while the reverse repurchasing party shall refund the originally pledged bonds to the obverse repurchasing party.
Transaction in cash shall refer to the transaction activity in which both parties to the transaction agree upon the assignment of the ownership of bonds at a contractual stipulated price.
Article 4 Bonds as mentioned in the present Measures shall refer to the book-entry bonds such as government bonds, central bank bonds and financial bonds, etc., which are approved by the People's Bank of China to be used in transactions in the national inter-bank bond market.
Article 5 Bond transactions shall be in compliance with the principles of fairness, honesty, credibility and self-discipline.
Article 6 China Government Securities Depository Trust & Clearing Co. Ltd. (hereinafter referred to as CDC) shall be the institution designated by the People's Bank of China to handle registration, escrow and settlement of bonds.
Article 7 The People's Bank of China shall be the competent department in charge of the national inter-bank bond market.
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