China's central bank is introducing a registration system for banks and other financial firms to trade the interbank debt market, scrapping administrative approvals in line with Beijing's push to cut red tape. Simplifying business procedures and snipping red tape is a key plank in China's plans to reorient the world's second-biggest economy so that free markets have a greater role.
The central bank will step up supervision over trading of bonds, including treasury bonds, financial bonds, corporate bonds and asset-backed securities, to protect investors' interests, it said in a set of new rules posted on its website. Such bonds will be allowed to trade on the interbank debt market once they are registered with the authorities, according to the new rules.
Bond issuers must make announcements on "major events that could affect the timely payment of bonds", the rules say. Investors will be banned from dealing in debt repurchase agreements using their own bonds and barred from engaging in "activities to manipulate bond prices", the central bank added.
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