Media Focus | The first batch of pilot commercial banks to participate in the government bond futures business is fully implemented, and there will be more medium and long-term funds into the Treasury bond futures market.

Recently, China Construction Bank was approved to become a trading settlement member of China Financial Futures Exchange. So far, the first batch of pilot commercial banks (ICBC, ABC, BOC, CCB, BOCM) have fully implemented the Treasury bond futures business.

In February this year, the China Securities Regulatory Commission, the Ministry of Finance, the People's Bank of China, and the China Banking and Insurance Regulatory Commission jointly issued an announcement to allow the five major state-owned banks to participate in the first batch of Treasury bond futures transactions. In April, commercial banks’ participation in the Treasury bond futures business was officially launched, which helped to further enhance the representativeness of Treasury bond futures prices, form a unified and efficient financial market, improve the interest rate risk management capabilities of financial institutions, and optimize the yield curve of Treasury bonds, which is an important milestone in domestic financial futures market.

On July 1, the China Banking and Insurance Regulatory Commission issued the "Regulations on Insurance Funds Participating in Treasury Bond Futures Trading", and simultaneously revised the "Measures for Insurance Funds Participating in Financial Derivatives Trading" and the "Regulations on Insurance Funds Participating in Stock Index Futures Trading" to provide insurance funds the implementation rules for participating in the financial futures market.

Market participants believe that the participation of insurance funds in treasury bond futures will not only help enrich the investor structure of the futures market; it will also help enrich the risk management tools of insurance institutions, improve the risk management efficiency of insurance institutions, and attract other types of medium and long-term funds to participate in the financial futures market.

In order to cooperate with commercial banks in the pilot work of treasury bond futures business, CFFEX revised and released the implementation rules for treasury bond futures contracts and contract trading rules, delaying the opening of treasury bond futures by 15 minutes. After adjustment, the opening time of treasury bond futures is consistent with the opening time of the exchange bond market and stock index futures.

The importance of treasury bond futures has become increasingly prominent. On July 29, the Dalian Commodity Exchange issued a notice to introduce national debt as a margin business. The introduction of treasury bonds as margin for commodity futures can further enrich the forms of futures margin, reduce transaction costs, and improve operational efficiency. It will help attract institutional investors holding treasury bonds to actively enter the market, while also greatly increasing the weight of treasury bond futures.

The introduction of treasury bonds as a futures margin business is also in the task list of the CFFEX. Hu Zheng, secretary of the party committee and chairman of the CFFEX, stated that the CRREX will steadily promote the supply of new products such as stock index, interest rate, exchange rate futures and options, increase product innovation, and focus on complementing risk management tools. At the same time, it will continue to optimize the financial futures market rule system, introduce a cross-variety one-way large-side margin system, and treasury bonds as a futures margin business to effectively reduce market transaction costs; launch treasury bond futures market making and EFP business, and accelerate the promotion of commercial banks, Insurance funds participate in treasury bond futures to continuously improve the trading mechanism and enhance the quality and vitality of market operations.

The current products listed by CFFEX include three stock index futures of CSI 300, CSI 500, and SSE 50, three treasury bond futures of 2-year, 5-year, and 10-year, and CSI 300 stock index options. At present, the financial futures market has a good trading order, its functions are gradually brought into play, and the futures and currents are closely linked, maintaining the development trend of "progress in stability".