BEIJING, Nov. 3 (Xinhua) -- China's central bank conducted an operation of the Securities, Funds and Insurance companies Swap Facility (SFISF) on Tuesday to support the healthy and stable development of the country's capital market.
With 31 securities and fund companies participating in the bidding process, the operation totaled 100 billion yuan (about 14.89 billion U.S. dollars) at a winning bid rate of 10 basis points, the People's Bank of China (PBOC) said in a statement.
Introduced in October 2024, the SFISF allows eligible securities, fund and insurance companies to use assets, including bonds, stock exchange-traded funds and shares in companies on the CSI 300 Index, as collateral in exchange for highly liquid assets, such as treasury bonds and central bank bills.
This facility is designed to improve participating institutions' access to funding and enhance their capacity to increase stock holdings.
In October 2024, the central bank conducted its first SFISF operation, worth 50 billion yuan, with 20 institutions bidding and a winning bid rate of 20 basis points.
The second operation took place in January 2025, again with 20 institutions bidding. The amount rose to 55 billion yuan and the winning bid rate fell to 10 basis points.
This time, both the number of participating institutions and the operation amount far exceeded those in the previous two operations.
Industry insiders believe the steady implementation of the swap facility will help put existing assets to better use, facilitate liquidity management across markets like stocks and bonds, and provide a sustained flow of fresh liquidity to the capital market, thereby encouraging longer-term investment and strengthening the market's inherent stability.
In a statement released Monday, the PBOC said it had held a meeting with the National Financial Regulatory Administration and the China Securities Regulatory Commission, calling for more effective use of the SFISF and the relending facility for share buybacks and shareholding increases.
The PBOC said it will conduct SFISF operations in a timely manner, expand the number of participating institutions, appropriately lower swap fees, and optimize the collateral and operational arrangements. ■
