To implement the guidelines made by the Central Financial Work Conference, promote high-quality development of the bond market, and expand the channels for people to increase property income, the People’s Bank of China (PBOC) issued the Notice on Matters Concerning the OTC Business in the Interbank Bond Market. Recently, the PBOC held a meeting on the over-the-counter (OTC) bond business to discuss and make arrangements for relevant work. PBOC Deputy Governor Lu Lei attended and addressed the meeting.
As noted at the meeting, the OTC bond business, which forms an important part of China’s bond market, can help advance inclusive finance, increase the share of direct financing, optimize the structure of the financial system, and promote development of a multi-tiered bond market. The development of the OTC bond business has wide space and requires long-term systematic efforts. All the relevant institutions should work closely together in improving the rules for the OTC bond business, building up the systems for OTC bond trading, custody, settlement and market-making, and enhancing internal synergy so as to quickly bring out market effect. OTC bond service providers should take effective measures to prevent risks, to conduct internal control as well as investor suitability management, and to offer individuals, enterprises and small and medium-sized financial institutions the types of bond investment and trade products and the means of trade in line with their risk-bearing capacity, thereby promoting stable and sound development of the OTC bond business.
Representatives from Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Industrial Bank, and China Development Bank shared their practices and proposals. Also present at the meeting were officials from the relevant departments of the Ministry of Finance, the PBOC, the National Financial Regulatory Administration, and the China Securities Regulatory Commission, and representatives from policy banks, some joint-stock banks, securities companies, the National Association of Financial Market Institutional Investors, and financial infrastructures of the interbank market.
