October 28, 2024 — The People’s Bank of China (PBOC) has initiated the first operation of the Securities, Funds and Insurance Companies Swap Facility (SFISF) as part of its strategy to enhance the role of financial institutions in stabilizing the capital market. The operation, which was conducted on Monday, involved a scale of 50 billion yuan (approximately $7.04 billion).
This move follows the PBOC’s announcement on October 10 regarding the establishment of the SFISF, which has an initial scale of 500 billion yuan. The facility is designed to support the healthy and stable development of China’s capital markets.
Eligible securities, funds, and insurance companies can now use their assets—such as bonds, exchange-traded funds, and stocks from the CSI 300 Index—as collateral to secure highly liquid assets, including treasury bonds and central bank bills. This mechanism aims to enhance liquidity and provide greater stability to the market.
The SFISF was officially launched on Friday, with initial application quotas exceeding 200 billion yuan. A total of 20 securities and fund companies have been approved to participate in the SFISF operations.
Investment bank China International Capital Corporation (CICC) has also been involved in these operations, signaling strong institutional support for the new facility.