PBoC is to set up bond market NBFI swap facility to maintain bond market stability

To further implement the requirement of "building a scientific and sound monetary policy system and a comprehensive macro-prudential management system" and maintain the stability of the bond market, the People's Bank of China (PBOC) has decided to establish the Bond Market Non-Bank Large-Scale Redemption Swap Facility (BNSF). In specific scenarios where asset management institutions face collective liquidity risks and the bond market experiences systemic pressure, the BNSF supports bank wealth management subsidiaries and public fund managers (or their corresponding parent banks, securities parent companies, etc.) with systemic influence to borrow central bank bills from the PBOC for market repurchase financing to purchase eligible bonds or product shares of their own (or asset management subsidiaries') redeemed public offering products, which will then be pledged to the PBOC. Participating institutions should continuously meet the requirements of financial market prudential management and maintain market discipline.