On May 22, SZSE, SSE revised guides re bond pledged negotiated repo.
SZSE revised Bond Trading Business Guideline No. 4 - Risk Control for Bond Pledged Negotiated Repo Transactions.
Follows SSE Feb. 2026 issued a notice revising bond trading business guide, #227865.
Also follows SSE, SZSE Dec. 2022 issued guidelines for bond pledge-style repo, #158236.
Revised Guideline
SZSE will support eligible repo transactions using specified collateral, including government bonds, local government bonds, policy financial bonds.
Plus government-supported institution bonds, AAA-rated corporate or enterprise bonds, asset-backed securities, and bond ETFs.
Publish voluntary lists of repo fund providers willing to accept specified collateral.
Encourage standard repo tenors of 1, 7, 14, 21, 30, 90, 180, 270, and 365 days.
Allow negotiated collateral conversion ratios up to 100% for eligible institutional borrowers and their public fund products.
Existing SZSE negotiated repo transactions that do not meet the revised requirements must be adjusted within six months.
SZSE's previous 2022 guideline, issued on Dec. 30, 2022, is repealed.
Bond ETFs
SZSE also issued notice to confirm that listed bond ETFs may be used as negotiated repo collateral from Oct. 26, 2026.
For bond ETFs, the repo transaction amount must not exceed the number of pledged ETF units multiplied by the previous closing price.
If a bond ETF enters delisting procedures or another abnormal situation, the parties must notify each other promptly and may resolve the issue through early termination, collateral replacement, continued performance, or another SZSE-recognized method.
SSE
SSE issued notice for negotiated repo business, including fund-provider list disclosure, standard tenor encouragement, and collateral conversion ratios up to 100%.
For repo financing using corporate bonds, enterprise bonds, or asset-backed securities, the pledged nominal value of a single collateral security must not exceed 30% of that security’s outstanding issued amount, calculated at the single securities account level.
If the 30% cap is breached for non-subjective reasons, investors must restore compliance within 10 trading days.
Investors may not use corporate bonds, enterprise bonds, or asset-backed securities issued by themselves or affiliates as repo collateral.
Defaulted securities, or securities with disclosed material repayment risk, may not be used for negotiated repo declarations or collateral substitution.
SSE requires repo rates above 5% to include a deviation reason and reasonableness explanation in the transaction declaration.
Will monitor negotiated repo transactions and defaults, and may notify all participating institutions of default events.
SSE Trading Business Guide
SSE revised Bond Trading Business Guideline No. 1 - Trading Business, updating negotiated repo collateral scope, treatment of income during the repo term, and off-exchange fund settlement material-submission arrangements.
SSE’s prior Feb. 11, 2026 version of the guideline is repealed.
Effectiveness
SSE's notice and the revised business guidelines are effective from May 22, 2026; the SZSE notice re bond ETFs is effective from Oct. 26, 2026.
