According to the overall plan of CSRC, SZSE officially launched bond market making business on February 6. The first 12 market makers of Shenzhen market have completed relevant business preparations and will officially enter the market and provide bond market making service. Introducing the bond market maker system is another important measure of SZSE to step up the infrastructure building of the bond market. It will help further improve market pricing efficiency and promote the high-quality development of the bond market.

Since the implementation of the reform to separate the trading of stocks and that of bonds by SZSE, the Shenzhen bond market has maintained stable operation and the quality of operation has been further improved. The bond market maker system is an important part of the efforts to build a bond trading mechanism. Introducing bond market makers to provide continuous quotation support for market making bonds will help guide the market to make reasonable pricing, strengthen the stability of the bond market, facilitate conclusion of transactions by investors and increase investment willingness, thus improving the direct financing efficiency of the bond market. It will also help form reasonable bond yield curves of major bond types, provide valuable pricing reference, strengthen the development foundation of the bond market, and promote the healthy development of the bond product system.

In January 2022, on the basis of summing up and learning from the operating experiences of funds and derivatives business liquidity supporting mechanisms, SZSE formulated and issued theBond Trading Business Guidelines No. 3 – Bond Market Makingand the supporting guide, to standardize bond market making services launched by market institutions. In view of the characteristics of the bond market, SZSE has introduced a layered mechanism. Bond market makers can choose independently to provide continuous market making serviceto reference market making bond types as lead market makers, or to conduct market making business for selected bond types as general market makers. To encourage market participants to actively quote prices and improve market making efficiency, SZSE has issued the list of reference market making bond types. Take the latest version of the list for example. It includes 186 bonds and covers mainstream bond types such as central government bonds, local government bonds, policy financial bonds, governmental agency bonds and credit bonds. Bond market makers can apply a combination of trading methods including matching, clicking and inquiry and others to offer market marking quotations. They can also use negotiation deal combination declaration function torealize trading netting of two transactions and reduce market making cost. Furthermore, SZSE had launched bond lending business earlier, which can help enrich market makers’ position management measures and facilitate implementation of market making business.

Next, under the leadership of CSRC, SZSE will continue to actively guide market markers to conduct bond market making business according to regulations on the basis of risk control. We will promptly sum up market making business experiences and constantly optimize the market making trading mechanism. Meanwhile, we will coordinate with relevant parties to enrich and improve the market maker supporting mechanism, and put forth effort to energize the market, give play to market functions and create market synergy, to further improve the quality and efficiency of the services of the SZSE bond market for the real economy.