The People's Bank of China will carry out the third operation of swap facilities for securities, funds and insurance companies

China News Service, Beijing, November 2 (Tao Siyue) The People's Bank of China issued an announcement on November 2 that in order to support the healthy and stable development of the capital market, it will launch securities, funds, and insurance company swap facilities (SFISF) operations on November 3. The swap period will be one year, which can be extended depending on the situation. Currently, there are 31 securities and fund companies with application requirements, and the application quota exceeds 100 billion yuan (RMB, the same below).

Previously, SFISF carried out two operations in October 2024 and January 2025, with scales of 50 billion yuan and 55 billion yuan respectively, with 20 institutions participating in the bidding.

On the 2nd, the People's Bank of China and the China Securities Regulatory Commission convened a meeting of some securities companies and fund companies to study and promote the use of capital market tools. The meeting received great attention from the market, and the above announcement was released after the meeting.

As a monetary policy tool to support the capital market, SFISF supports qualified securities firms, funds, and insurance companies to use bonds, stock ETFs (traded open-end index funds), Shanghai and Shenzhen 300 constituent stocks and other assets as collateral to exchange high-grade liquid assets such as central bank bills from the central bank, and raise funds in the market for use in the capital market, so as to better play the role of securities fund institutions in stabilizing the market.

In terms of rates, SFISF uses rate bidding and a single price to win the bid. The winning bid rates for the first two operations showed a downward trend: the winning bidding rate for the first operation in October 2024 was 20 basis points, and the winning bidding rate for the second operation in January 2025 dropped to 10 basis points.

Industry insiders believe that the steady implementation of SFISF operations will be more conducive to revitalizing assets, coordinating liquidity among different markets such as the stock market and bond market, continuing to bring "live water" to the capital market, and enhancing the long-term nature of investment behavior and the inherent stability of the market. The amount of institutions intending to apply and the number of applicants this time exceed the previous two batches, indicating that this tool effectively plays a supporting role in stabilizing the capital market and is widely recognized by securities firms, fund companies and other institutions.