The People's Bank of China will now officially launch the Securities, Fund and Insurance Company Exchange Facilitative (SFISF) operation

The Zhitong Finance App learned that according to news from the People's Bank of China on October 18, the People's Bank of China recently created the Securities, Fund, and Insurance Company Exchange Facility (SFISF). In order to ensure the smooth operation of the tool, on October 18, the People's Bank of China and the China Securities Regulatory Commission jointly issued the “Notice on Accomplishing the Work Related to Securities, Funds, and Insurance Company Interchange Facilitation (SFISF)”, which clarifies business processes, operating elements, and the rights and obligations of both parties involved in the exchange facilitation operation.

The original text is as follows:

The People's Bank of China will now officially launch the Securities, Fund, and Insurance Company Exchange Facilitative (SFISF) operation

Recently, the People's Bank of China created the Securities, Fund, and Insurance Company Exchange Facility (SFISF). In order to ensure the smooth operation of the tool, on October 18, the People's Bank of China and the China Securities Regulatory Commission jointly issued the “Notice on Accomplishing the Work Related to Securities, Funds, and Insurance Company Interchange Facilitation (SFISF)”, which clarifies business processes, operating elements, and the rights and obligations of both parties involved in the exchange facilitation operation.

The People's Bank of China entrusts specific first-level open market traders (China Debt Credit Promotion Company) to carry out exchange transactions with securities, funds, and insurance companies that meet the requirements of industry supervisory authorities. The exchange period is 1 year and may be extended depending on circumstances. The exchange rate is determined by participating agencies' tenders. Available collateral includes bonds, stock ETFs, Shanghai and Shenzhen 300 constituent stocks, and public REITs. The discount rate is set in tiers according to the risk characteristics of the collateral. The funds obtained through this tool can only be invested in the capital market and used to invest and market stocks and stock ETFs.

Currently, there are 20 securities and fund companies that have been approved to participate in the convenient exchange operation, and the first batch of applications has exceeded 200 billion yuan. From now on, the People's Bank of China will officially launch operations according to the needs of participating institutions to support the stable development of the capital market.

This article was edited by the People's Bank of China, Zhitong Finance Editor: Chen Wenfang.