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