China’s central bank says to conduct second SFISF operation soon

The People’s Bank of China (PBC) announced on Tuesday that it would conduct the second operation of the Securities, Funds and Insurance companies Swap Facility (SFISF) soon, which aims to support the healthy development of the country’s capital market.

“In order to support the healthy and stable development of the capital market, the People’s Bank of China will conduct the Securities, Funds and Insurance companies Swap Facility (SFISF) operation for the second time in the near future with the maturity of 1 year and rollover allowed as circumstances require.”

The anticipated SFISF operation will be implemented for eligible securities firms, fund management companies and insurance companies. The PBC said the rate would be determined through bidding by the institutions participating in the tender. Bidding applications will be accepted as of today.

The central bank set up the SFISF in October. The tool allows eligible securities, funds and insurance companies to use their assets, including bonds, stock ETFs, and holdings in constituents of the CSI 300 Index, as collateral in exchange for highly liquid assets such as treasury bonds and central bank bills.

In October, the Chinese central bank launched the SFISF, a tool designed to enhance market liquidity and stability. Under the SFISF, eligible securities firms, funds, and insurance companies can use their assets—including bonds, stock ETFs, and shares of CSI 300 Index constituents—as collateral to access highly liquid assets such as treasury bonds and central bank bills.

This move aims to strengthen financial resilience, providing institutions with a reliable liquidity backstop while supporting the broader stability of China’s financial markets.

Attribution: Amwal Al Ghad English & Xinhua