Interoperability to Be Seen in China Investor Bond Balances
To enhance bond market liquidity and prevent market risk, the Shanghai Stock Exchange (SSE) will change the separate management over investors’ balances of bonds listed on both the fixed income platform and the auction system (including the block trading system) by the above two systems to the centralized management by the auction system.
According to the “Notice of Interoperability in Investors’ Bond Balances” published by the SSE, the cross-system short selling of bilaterally listed bonds will be technically controlled through the auction system to prevent overselling, while the ways of ordering and spot trading of bonds through the fixed income platform and the auction system as well as the trading schedule remain unchanged. The notice also stipulated that the collateralized repo will be conducted through the auction system, with the ways of ordering for trading and in-and-out storage of pledged bonds remaining unchanged. Meanwhile, the fixed income platform will not accept orders for in-and-out storage of pledged bonds temporarily.
Besides, the T+0 cross-system trading of bilaterally listed bonds will come true. To be specific, investors can place orders, through the auction system, for storage of the bonds on the very day of buying them on the fixed income platform, and participate in collateralized repo. And the bonds can be sold through the fixed income platform on the same day when the orders for their out-of-storage are placed in the auction system.