FINANCE

Exclusive: China Tightens Oversight of Smaller Banks’ Exchange Bond Trading

Published: Mar. 26, 2026 3:35 p.m. GMT+8

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Local branches of China’s monetary authority have verbally instructed some banks to limit proprietary trading in exchange-traded bonds to the centralized exchange trading system, Caixin learned from sources familiar with the matter.

Local central bank officials in Jiangsu province have directed some small and midsize banks to refrain from using the exchanges’ over-the-counter fixed-income platform, the sources said Thursday.

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Chinese authorities instructed some banks to limit bond trading with their own funds to centralized trading systems, reiterating 2019 guidance.
The restriction currently targets smaller banks in Jiangsu province and excludes state-owned banks.
The guidance could impact secondary trading of privately placed bonds and ABS, though it does not apply to primary issuance, and regulators deny a broad ban.

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What Happened When

2019：: A regulatory notice expanded banks’ access to bonds traded on exchanges but required the use of centralized trading systems.

March 25, 2026：: A self-regulatory body under China’s central bank spoke to Caixin, denying market rumors that regulators had broadly banned banks from investing in exchange-traded privately placed bonds and ABS.

March 26, 2026：: Authorities in Jiangsu province directed several local small and midsize banks to restrict their use of the fixed-income trading platform in bond trading activities.

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