Definition of Instrument

Pledged repo is a type of short-term financing business where bonds are used by both trading parties as a pledge of rights. It refers to a financing act in which borrower (positive repo party), pledges bonds to lender (reverse repo party) for funds, and at the same time two parties agree upon that when at a future date positive repo party returns the amount of funds calculated at the specified repo rate to the reverse repo party, the reverse repo party shall lift the pledged rights on the pledged bonds.

Trading Mechanism

Bilateral trading

Terms

The terms of pledged repo range from 1 day to 365 days. Through the trading system, the trading volume and price of pledged repo is publicly released as a total of 11 terms including 1-day, 7-day, 14-day, 21-day, 1-month, 2-month, 3-month, 4-month, 6-month, 9-month and 1-year.

Trading Hours

T+0: Beijing time 9:00-12:00 am, 1:30-4:50 pm, 

T+1: Beijing time 9:00-12:00 am, 1:30-5:00 pm,

excluding Chinese statutory holidays.

Market Participants

Commercial banks and its authorized branches, rural credit cooperatives, urban credit cooperatives and other deposit-taking financial institutions, insurance companies, securities companies, fund management companies and their managed funds, portfolios, insurance products, financial companies and other non-bank financial institutions which all have bond trading qualification, and foreign-funded financial institutions which conduct RMB business, can all enter into the bond market for transaction.

Method of Clearing & Settlement

The two trading parties, at the specified date, shall handle gross settlement of funds at their own risk in accordance with deal sheet. Depository bond settlement is carried out through the China Central Depository & Clearing Co., Ltd, while funds settlement is conducted through the China National Automatic Payment System of PBC. Three types of settlement, namely "payment after delivery ", " delivery after payment " and "DVP", are available.