On October 10th, the People’s Bank of China (PBOC) unveiled a new initiative to strengthen the stability of its capital market, as announced on its official website. This move is in line with the directives issued during the third plenary session of the 20th Central Committee, which called for the establishment of a long-term framework to enhance the inherent stability of capital markets.

To achieve this goal, the PBOC is rolling out the Securities, Funds, and Insurance Companies Swap Facility (SFISF). This new facility will allow eligible securities, funds, and insurance companies to pledge a range of assets—including bonds, stock exchange-traded funds (ETFs), and equities from the CSI 300 index—as collateral in exchange for high-quality liquidity assets like government bonds and central bank notes.

The initiative will initially operate with a scale of 500 billion yuan, with plans for further expansion contingent on market conditions. As of today, qualified securities, fund, and insurance companies are invited to begin submitting their applications for participation.