Shanghai Stock Exchange: Supporting overseas institutional investors to carry out Shanghai Stock Exchange bond repurchase business

The Zhitong Finance App learned that on December 19, the Shanghai Stock Exchange issued a notice on matters relating to supporting overseas institutional investors to carry out the Shanghai Stock Exchange bond repurchase business. The notice indicates that overseas institutional investors who meet the requirements of the “Notice” and the requirements for cash trading of Shanghai Stock Exchange bonds can carry out the Shanghai Stock Exchange bond repurchase business. The bond repurchase business referred to in the notice includes bond pledged agreement repurchases and bond-pledged tripartite repurchases, and financing as a reverse repurchaser in the general pledged bond repurchase business. The Shanghai Stock Exchange and China Settlement can adjust the scope of bond repurchase business that overseas institutional investors can carry out according to market development needs.

The original text is as follows:

Notice on matters relating to supporting overseas institutional investors to carry out Shanghai Stock Exchange bond repurchase business

Shanghai Stock Exchange [2025] No. 129

Various market participants:

In order to further open up the exchange bond market to the outside world and support overseas institutional investors to carry out bond repurchase business in the exchange market, according to the “Notice on Further Supporting Overseas Institutional Investors to Develop Bond Repurchase Business in the Chinese Bond Market” (People's Bank of China Securities Regulatory Commission Notice (2025) No. 21, hereinafter referred to as the “Notice”) and the relevant business rules of the Shanghai Stock Exchange (hereinafter referred to as the Shanghai Stock Exchange) and China Securities Registration and Settlement Co., Ltd. (hereinafter referred to as China Settlement), the Shanghai Stock Exchange is now being launched for overseas institutional investors The notice on matters relating to the bond repurchase business is as follows:

1. Overseas institutional investors who meet the requirements of the “Notice” and the requirements for cash trading of Shanghai Stock Exchange bonds may carry out the Shanghai Stock Exchange bond repurchase business.

The bond repurchase business referred to in this notice includes bond pledged agreement repurchase, bond pledged tripartite repurchase, and financing as a reverse repurchase party in general pledged bond repurchase business. The Shanghai Stock Exchange and China Settlement can adjust the scope of bond repurchase business that overseas institutional investors can carry out according to market development needs.

2. Overseas institutional investors carrying out the Shanghai Stock Exchange bond repurchase business shall abide by the provisions of laws, administrative regulations, departmental regulations, regulatory documents, and the relevant business rules of the Shanghai Stock Exchange and China Settlement.

3. Where overseas institutional investors directly participate in the Shanghai Stock Exchange bond repurchase business, matters such as accounts, transactions, registration, and settlement shall be handled in accordance with the “Shanghai Stock Exchange China Securities Registration and Settlement Co., Ltd.” and other regulations.

Where overseas institutional investors carry out the Shanghai Stock Exchange bond repurchase business through channels of qualified overseas institutional investors and RMB qualified overseas institutional investors, matters such as accounts, transactions, registration, and settlement shall be handled in accordance with the provisions of the “Shanghai Stock Exchange Securities Trading Rules Applicable Guidelines No. 1 - Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors” and “China Securities Registration and Settlement Co., Ltd. Qualified Overseas Institutional Investors and RMB Qualified Foreign Institutional Investors Implementation Rules for Domestic Securities Investment and Settlement Business.”

4. Overseas institutional investors shall entrust domestic securities companies (hereinafter referred to as transaction participants) with Shanghai Stock Exchange membership to participate in bond repurchase transactions. Where laws, administrative regulations, departmental regulations, regulatory documents, and the relevant business rules of the Shanghai Stock Exchange stipulate otherwise on how overseas institutional investors participate in bond repurchase transactions, the regulations shall apply therein.

In accordance with the relevant regulations of the Shanghai Stock Exchange, overseas institutional investors shall sign a general pledge bond repurchase entrustment agreement with the securities company they entrust; before participating in the pledged bond repurchase agreement or the bond-pledged tripartite repurchase, they shall sign the corresponding main repurchase transaction agreement and other documents. An investor suitability filing should also be carried out before participating in a bond-pledged tripartite repurchase.

5. Participants in transactions commissioned by overseas institutional investors shall abide by the relevant business rules of the Shanghai Stock Exchange, be diligent and conscientious, and strengthen the management of overseas institutional investors' declarations and transactions. If it is discovered that an overseas institutional investor's bond repurchase transaction exists or may be in violation of regulations, measures shall be taken in accordance with the proxy agreement and promptly reported to the Shanghai Stock Exchange.

Settlement participants providing settlement services for overseas institutional investors to participate in the bond repurchase business shall abide by the relevant business rules of Chinese settlement, strengthen the management of bond repurchase and settlement risks for overseas institutional investors, and promptly take measures and report to the Chinese settlement where there are or may be hidden settlement risks.

6. The Shanghai Stock Exchange and China Settlement monitor the transactions, registration, settlement and other related acts of overseas institutional investors and their commissioned transaction participants and settlement participants participating in the Shanghai Stock Exchange bond repurchase business, and take self-regulatory management measures against irregularities in accordance with relevant business rules; if the circumstances are serious, they are reported to the China Securities Regulatory Commission for investigation and punishment.

7. This notice takes effect from the date it is issued.

Shanghai Stock Exchange China Securities Registration and Settlement Co., Ltd.

December 19, 2025

This article was selected from the “Shanghai Stock Exchange” website, Zhitong Finance Editor: Feng Qiuyi.