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The Shanghai Stock Exchange (SSE), on the basis of combing the existing business rules related to bond trading, has drafted the SSE Bond Trading Rules and the supporting guidelines for the management of bond trading participants, the general pledge repo and the bond market-making business (hereinafter referred to as the bond trading rules and supporting guidelines). The move aims to further implement the overall requirement of the high-quality development of the exchange-traded bond market, standardize bond trading, and promote sustainable and healthy development of the exchange-traded bond market, according to the new Securities Law and other laws and regulations, public opinions will be solicited in the market for three weeks from now to May 21.
Thanks to the reform of corporate bond issuance system since 2015, the SSE bond market has significantly increased its bond issuance and outstanding volume and its ability to serve the real economy. In 2020, the total amount of financing in the bond market reached 6.59 trillion yuan, an increase of 3.3 times over the same period in 2015. Yet there are still some shortcomings in the construction of the secondary bond market. Among other things, the bond price discovery mechanism needs to be strengthened, and the bond trading mechanism does not fully reflect the laws and characteristics of the bond market.
For better investor services and high-quality development of the bond market, the exchange follows the guidance of the China Securities Regulatory Commission and the objective law of the bond market, featuring transactions of large amount, low turnover and mainly by institutional investors and drafts bond trading rules and three supporting guidelines. The aim is to build a relatively independent bond trading rule system epitomizing the features of the bond market. The main updates include: first, to establish and improve the system of bond trading participants, adjust relevant arrangements for all kinds of participants in bond trading adaptively, and facilitate bond investors to participate in the exchange-traded bond market; second, to establish a bond market-making system to further enhance the market liquidity; third, to promote the innovation of trading mechanism. On the basis of inheriting the existing trading mechanism, the bond trading mode has been expanded, and bidding mechanism introduced, types of declaration orders enriched, and s trading information optimized; fourth, to guard against bond trading risks. Abnormal price fluctuations and abnormal transactions are controlled through institutional arrangements.
Under the guidance of the CSRC, the SSE will actively listen to the voices of all market participants, collect, evaluate and adopt market feedbacks, and ensure the sound implementation of bond trading rules and supporting guidelines.
Attachment:
Notice on Soliciting Public Opinions on SSE Bond Trading Rules and Supporting Guidelines
