Home » Increase residents’ property income, accelerate the development of the multi-level bond market, expand the variety of over-the-counter bond investments and improve convenience_China Securities Network

Increase residents’ property income, accelerate the development of the multi-level bond market, expand the variety of over-the-counter bond investments and improve convenience_China Securities Network

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The People’s Bank of China Issues Notice to Expand Over-the-Counter Bond Market

On February 29, the People’s Bank of China issued a notice regarding counter business in the inter-bank bond market, aiming to expand the types of over-the-counter bond investments and optimize institutional arrangements. The goal is to facilitate bond investment by residents and institutional investors, increase residents’ property income, and accelerate the development of the multi-level bond market.

The notice clarifies the scope of counter investors, including individual investors, companies, and financial institutions. It also specifies that over-the-counter bond types include treasury bonds, local government bonds, financial bonds, corporate credit bonds, and other inter-bank bond market bond types. The over-the-counter business operators and financial institutions now offer bond lending and derivatives trading options.

Previously, the “Measures for the Administration of Counter Business in the National Interbank Bond Market” had limited the types of bonds available for over-the-counter business. The new notice optimizes the management rules for investor account opening, making it easier for investors to participate in the over-the-counter bond market.

Currently, 30 commercial banks across China offer over-the-counter bond business services, with 6.3 million investor accounts opened by the end of 2023. The most traded over-the-counter bond types include Chinese bonds, local government bonds, and policy financial bonds.

Individuals can purchase treasury bonds and local government bonds through over-the-counter transactions at these commercial banks. Compared to other financial products, over-the-counter bonds have higher coupon rates and provide residents with low-risk investment options with stable returns.

The People’s Bank of China believes that expanding over-the-counter bond business will not only increase residents’ investment channels and property income but also optimize the financing structure and promote the development of direct financing. It will also enhance market activity and promote market stratification in the multi-level bond market.

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Institutions operating over-the-counter business are required to establish an investor suitability management system, disclose product risks, strengthen internal control management, and clarify risk rights and responsibilities with investors. These measures aim to prevent risks and safeguard the interests of investors in the over-the-counter bond market.

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