Recently, three authorities, including the National Interbank Funding Center ("NIFC"), have jointly released the Circular on Matters Concerning Performance Guarantees for the Pre-issuance of Treasury Bonds in the Interbank Bond Market (the "Circular"), and meanwhile, the China Central Depository and Clearing Company Limited ("CCDC") has released the Circular on Matters Concerning the Pre-issuance of Treasury Bonds in the Interbank Bond Market.
The Circular clearly states that, the pre-issuance trading of treasury bonds is subject to the performance guarantee regime. Guarantees provided for the pre-issuance of treasury bonds include guaranty money and guaranty securities. Guaranty securities shall be treasury bonds, local government bonds, central bank bills, or bonds issued by development-oriented financial institutions and by policy banks. Both sides may select to provide each other with a guarantee for the performance or opt to have a third party offer centralized management services for guarantees provided for the performance. The Circular on Matters Concerning the Pre-issuance of Treasury Bonds in the Interbank Bond Market provides that, institutions participating in the pre-issuance of treasury bonds shall, pursuant to relevant business rules, submit to the CCDC preparatory documents to acquire the business qualification, prior to the commencement of such business. At the same time, the Guidelines of the China Central Depository and Clearing Company Limited on the Pre-issuance of Treasury Bonds have been distributed.