The People’s Bank of China, the country’s central bank, announced on Monday that it will conduct a new round of operations under its securities, funds and insurance companies swap facility (SFISF) on Tuesday to support the sound and stable development of the capital market.
The swap facility will have a one-year tenor, with possible extensions, the central bank said in a statement. So far, 31 securities firms and fund management companies have applied for more than 100 billion yuan ($15 billion) under the facility, the central bank said.
Introduced in October 2024, the facility allows eligible securities firms, fund managers and insurers to swap assets including bonds, stock exchange-traded funds and CSI 300 Index constituent shares for highly liquid assets such as government bonds and central bank bills.
The funds obtained under the SFISF should be used exclusively for capital market investments, including stock and stock ETF investments and market-making.
Market observers said the latest operation would enhance non-banking financial institutions’ financing capacity, channel fresh capital into the equity market and reinforce a positive feedback loop supporting market stability.
