For the purposes of better meeting the demand for liquidity management from investors in the interbank bond market and strengthening risk prevention, in accordance with the relevant provisions of the Measures for the Administration of Bond Transactions in the National Inter-Bank Bond Market (Order No. 2 [2000], PBC), the Measures for the Administration of the Registration, Custody and Settlement of Bonds in the Inter-bank Bond Market (Order No. 1 [2009], PBC), the matters concerning conducting tri-party repos in the inter-bank bond market are hereby announced as follows:
I . For the purpose of this Announcement, a tri-party repo is a repurchase transaction where an investor in the interbank bond market (hereinafter referred to as the “investor”) voluntarily entrust a bond registration, custody and settlement institution designated by the People's Bank of China (“PBC”) as a third party (hereinafter referred to as the third-party institution) to carry out centralized management of collateral, including the selection, valuation, replacement, and adjustment of it.
II . Third-party institutions, trading platforms, and central counterparties recognized by the PBC may provide management, trading, centralized clearing and other related services for tri-party repos.
III . Before providing services such as the management of collateral for tri-party repos, third-party institutions shall agree with the investors on the matters related to collateral management.
The Master Agreement on Bond Repurchase Transactions in the Inter-bank Market of China, agreements related to collateral management, and transaction contracts jointly constitute a complete tri-party repo contract.
IV . Third-party institutions shall, in consultation with investors, determine the scope and discount rate standard of qualified collateral and publish them after the approval of the PBC, and at them same time disclose the valuation method of collateral. The market value of collateral shall be sufficient during the duration of tri-party repos.
The PBC may, as the case may be, require third-party institutions to adjust the scope, discount rate standards and valuation methods of qualified collateral.
V . Where a tri-party reps is due to default, the third-party institution may, according to the agreement between the repurchase parties, deal with the repo collateral of the party in breach in accordance with the law.
VI . Third-party institutions and trading platforms shall effectively carry out leverage ratio monitoring, information disclosure and data submission in relation to investors' repurchase.
VII . Third-party institutions, trading platforms and central counterparties shall submit the formulation and adjustment of the business rules and agreement texts related to tri-party repos to the PBC for approval.
VIII . After a tri-party repo is completed, the third-party institution shall transmit the settlement status to the trading platform in real time.
IX . The branches of the PBC shall strengthen the daily inspection of the institutions that carry out tri-party repo business within their jurisdictions.
X . The National Association of Financial Market Institutional Investors shall strengthen the self-regulation management of tri-party repos, and effectively link the Master Agreement on Bond Repurchase Transactions in the Inter-bank Market of China with tri-party repos.
XI . This announcement shall come into force on the date of issuance.
October 9，2018
