China's central bank to conduct second SFISF operation

BEIJING -- China's central bank said Tuesday that it would conduct the second operation of the Securities, Funds and Insurance companies Swap Facility (SFISF) soon, which aims to support the healthy development of the country's capital market.

The second SFISF operation will have a swap term of one year, with the possibility of extension under certain conditions, according to a statement on the People's Bank of China website.

The central bank set up the SFISF in October. The tool allows eligible securities, funds and insurance companies to use their assets, including bonds, stock ETFs, and holdings in constituents of the CSI 300 Index, as collateral in exchange for highly liquid assets such as treasury bonds and central bank bills.

Also in October, China conducted the first operation of the SFISF, with a scale of 50 billion yuan ($6.96 billion), involving 20 securities and fund companies in the bidding process, the China Securities Regulatory Commission said Tuesday in a separate statement.

The commission has expanded the participant pool to 40 by adding 20 more eligible institutions. During each batch of operations, approximately 20 institutions will be chosen based on their intended scale of participation to engage in the bidding.

These institutions should fully leverage their professional investment capabilities and strengthen compliance and risk control management to promote the stable and healthy development of the capital market, the commission said.