STP in Inter-bank bond market , China

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STP in Inter-bank bond market , China

• China Government Securities Depository Trust
  Clearing CO.,LTD
• June,2008
• Indonesia

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Contents

• 1. Introduction
• 2. STP in China
• 3. Development Objectives

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1.Introduction

• 1.1 The Business Scope of CDC
• 1.2 The Inter-bank bond market of China consists
  Trading System of China Foreign Exchange Trade
  System (CFETS) and Central Bond Book-entry
  System (CBBS) of CDC.

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1.1The Business Scope of CDC
? Registration, depository, settlement and principal redemption/interest payment agency services for government bonds, financial debentures, corporate bonds and other fixed-income securities ? Technical support for the Open Market Operation system and the bond issuing system of People's Bank of China. ? Registration, depository and settlement services for bond funds and money market funds. ? Information consultant and internet services for bond market and money market. ? Research, consultant service, training and media for bond market and money market. ? Depository and cross-border settlement for fixed-income securities of foreign currency, and services for related settlement and international business. ? Supervision over sub-depository of securities by approved of authorities. ? Other business approved by People's Bank of China and Ministry of Finance.

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1.2 CFETS and CBBS
Trading System of China Foreign Exchange Trade System All client make their trading on this system. The trading data has been packed and then sent to booking system in every ten minutes. Central Bond Book-entry System Checked trading data on Booking system. Feedback from booking system.

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2.STP in China

• 2.1 In order to minimize settlement risk, the
  settlement and clearing to occur simultaneously,
  the straight-through processing of data
  processing (Straight Through Processing, STP) has
  been widely used in the financial markets.
• 2.2 From 2004, PBOC start to cooperate between
  trading system and booking system.
• 2.3 Oct 8, 2005, an union network has been
  implemented in Inter-bank bond market.

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Flow Chart
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• The advantage of STP in Chinese Inter-bank bond
  market
• The efficiency of clearing has been
  dynamically improved .
• lower cost
• higher operational speed
• The end to end transaction,
• it will minimize the entire
  trading
• risk and prevent technique and
• human-been mistakes.

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Market Overview
Year Spot trading Spot trading Repo trading Repo trading Collateral repo trading Collateral repo trading Forward Forward
Year Transactions Par Value (100,000,000 RMB) Transactions Par Value (100,000,000 RMB) Transactions Par Value (100,000,000 RMB) Transactions Par Value (100,000,000 RMB)
2005 13863 18300 10162 35300 480 800 21 60
2006 79780 102500 68217 268200 1745 2900 381 760
2007 80618 161800 89515 452400 3507 7300 1267 2530
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3.Development Objectives

• 3.1 Strengthen laws and regulations
• 3.2 An union platform will be created between
  trading system and booking system without human
  been activities in middle ware. Eg. Currently,
  all client need to recheck on booking system.
• 3.3 Some standard and global rules will be
  published for trading data.
• 3.4 An universal system will be gradually
  established in Inter-bank bond market.

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• Thanks!

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• Contact us
• Zhang WEI
• jessica19810311_at_163.com
• 8610 88086310
• Fu Ying
• fy_at_chinabond.com.cn
• 8610 8807975