On February 21, 2020, with the consent of the State Council, the China Securities Regulatory Commission (CSRC), the Ministry of Finance, the People's Bank of China, and the China Banking and Insurance Regulatory Commission issued a joint announcement, allowing commercial banks and insurance companies to participate in the China government bond (CGB) futures market of China Financial Futures Exchange (CFFEX) in a phased manner under the prerequisite of ensuring regulatory compliance, control of risks, and business sustainability. Following the joint announcement, CFFEX shall open its CGB futures market to commercial banks with an official launch event on April 10.
Commercial banks' participation in the CGB futures market is an important achievement of the financial sector in line with the spirit of the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China, to deepen supply-side structural reform, and better serve the real economy. Furthermore, it is an important milestone in the development of China’s financial derivatives market, and is of great significance to improving the overall financial system, the risk management capabilities of financial institutions, and the yield curve of China government bonds.
Under the principle of “opening the CGB futures market to commercial banks with high standards in a risk-controlled manner to ensure a stable start”, CFFEX has actively engaged with commercial banks on their preparation, revised relevant Exchange rules, and is now ready for the launch.
Next, in line with CSRC's requirements of "Four Awes" and "One Synergy", CFFEX will thoroughly implement CSRC and relevant Ministries' plan regarding such participation in the CGB futures market, and also strive to ensure the stable operation of the CGB futures market through further strengthening market surveillance, enhancing market risk management, and improving member services and investor education.
