The China Securities Regulatory Commission (CSRC), in coordination with the People’s Bank of China (PBOC), has approved 31 securities firms and fund managers to participate in the third round of the Securities, Funds and Insurance Companies Swap Facility. Applications exceed CNY 100 billion. The PBOC has also made refinancing for share buybacks and shareholding increases a permanent arrangement and reduced the refinancing rate to 1%. The measures align with the CSRC’s 2026 priorities of countercyclical market support, broader funding sources and improved buyback arrangements. Planned revisions to share buyback rules would broaden access to repurchases undertaken to protect company value and shareholder rights while strengthening obligations on listed companies. A share price below the issue price would become an additional trigger, and these buybacks would be exempt from the six-month listing requirement and restrictions on orders during opening and closing call auctions. Companies listed for less than 36 months would have to honor commitments to stabilize their share prices when triggers arise. Companies with excess fundraising proceeds would be required to undertake buybacks promptly when those triggers are met. Annual cash dividend plans would have to earmark a proportion of funds for dedicated buyback reserves. Companies with excess fundraising proceeds would also have to allocate a proportion of those proceeds to reserves specifically for repurchases and cancellations. Gains from selling shares acquired through these protective buybacks would enter the reserves. The CSRC plans to revise the rules after further analysis and, pending formal amendments, will encourage eligible companies to implement buybacks along these lines. The first 18 actively managed exchange-traded funds have raised more than CNY 35 billion, with 16 reaching the individual fundraising cap of CNY 2 billion. The CSRC will encourage faster portfolio investment and explore additional products, including funds maintaining fixed proportions of equities and bonds. Separately, declining margin financing balances and trading activity have prompted plans to review initial margin requirements, collateral valuation ratios and maintenance requirements with exchanges and securities firms. The review aims to release financing capacity while keeping overall risks controlled, following the January increase in the initial margin requirement from 80% to 100%.
China Securities Regulatory Commission widens swap facility access and plans stronger share buyback requirements
The China Securities Regulatory Commission has approved 31 firms for a third swap facility round, with applications exceeding CNY 100 billion, alongside the central bank’s move to permanent buyback and shareholding increase refinancing at 1%. Proposed buyback changes would broaden eligibility and strengthen repurchase obligations and dedicated funding requirements. The regulator also reported over CNY 35 billion raised by the first 18 actively managed exchange-traded funds and plans to review margin financing controls to release financing capacity.