Caixin
Jan 06, 2018 06:18 AM
POLITICS & LAW

New Bond-Trading Rules Aim to Clean Up ‘Under-the-Table’ Deals

The People's Bank of China (above) and other regulatory bodies are hoping new rules will direct bond repurchase practices into a more transparent and regulated track. Photo: Visual China
The People's Bank of China (above) and other regulatory bodies are hoping new rules will direct bond repurchase practices into a more transparent and regulated track. Photo: Visual China

China’s top financial regulators are working together to regulate the country’s 67 trillion yuan ($10 trillion) bond market by introducing unified rules on bond trading, in what is the latest attempt to clean up excessive leverage and shady practices.

The new rules require that financial institutions sign written contracts for any bond repurchase or bond forward transactions. The rules also set a top limit for leverage ratios for institutions in such deals, according to the regulation document viewed by Caixin. The rules were drafted by the central bank and three regulatory commissions overseeing banking, securities and insurance.

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