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Circular concerning the Addition of the Open Market Operations Primary Dealers and the Establishment of the Mechanism concerning Appraising
and Adjusting the Primary Dealers in 2004
[2004] No 2
Each open market operations primary dealer and national inter-bank bond market member :
The Addition of the Open Market Operations Primary Dealers and the Establishment of the Mechanism concerning Appraising and Adjusting
the Primary Dealers in 2004are hereby notified as follows:
1.
Expanding the range of the open market operations primary dealers
Since 2004, some securities companies, insurance companies and rural credit cooperatives unions are added into the list of the open
market operations primary dealers by People’s Bank of China in addition to the commercial banks. Simultaneously, People’s Bank of
China chooses the open market operations primary dealers of different types of institutions to implement transactions subject to
the different operation varieties of open market operations. All the open market operations primary dealers, including the commercial
banks, securities companies, insurance companies and rural credit cooperatives unions, may take part in the People’s Bank of China’s
operation of the issue of central bank bills; the deposit financial institutions of the open market operations primary dealers, namely
the commercial banks and rural credit cooperatives unions, may take part in the operation of repurchase; priority shall be given
to the bond market-makers among open market operations primary dealers as approved by the People’s Bank of China in implementing
cash bond operation, and the People’s Bank of China may decide to implement the operation with all the open market operations primary
dealers in accordance with the market situation and the operation requirements .
2.
Adding open market operations primary dealers of 2004
According to the bonds underwriting situation of the primary bond market, the transaction situation of the secondary bond market,
assets scale, level of management and financial condition of the financial institutions, after considering the local elements, the
People’s Bank of China decided to add two securities companies, namely Guotai Junan Securities Co., Ltd.. and CITIC Securities Co.,
Ltd.; four insurance companies, namely China Life Insurance Co., Ltd., China Ping An Life Insurance Co., Ltd., Huatai Property Insurance
Co., Ltd. and Taikang Life Insurance Co.,Ltd.; two rural credit cooperatives unions, namely Rural Credit Cooperatives Union of Beijing
and Rural Credit Cooperatives Union of Shanghai; and one commercial bank Baotou Commercial Bank, totally nine institutions in all
as the primary dealers of open market operations. There are altogether 52 open market operations primary institutions in all in 2004.
See Appendix 1 for the detailed name list.
3.
Establishing the mechanism on appraising and adjusting the open market operations primary dealers
The People’s Bank of China establishes the mechanism concerning annually appraising and adjusting the open market operations primary
dealers since 2004. The specific content is as follows:
(1)
Making evaluation index system. The People’s Bank of China makes the evaluation index system towards the national inter-bank bond
market members (hereinafter referred to as market members), the main content of the system contains the situation concerning taking
part in open market operations, underwriting situation of the primary bond market, trading situation of the secondary bond market
and the implementation and conduction of monetary policies, etc. The specific evaluation index system can be found in Appendix 2.
(2)
Setting the index weight coefficient, scoring standards and the calculating value. The People’s Bank of China determines the index
weight coefficient, scoring standards and calculates the score value of major market members through comprehensive consideration
of all kinds of elements.
(3)
Determining the open market operations primary dealers subject to the rules. Since 2004, the number of open market operations primary
dealers shall be maintained at 52, among which, the proportions of commercial banks, insurance companies, insurance companies and
rural credit cooperatives unions shall be determined subject to the trading situation and the monetary regulation requirements of
the previous year. The People’s Bank of China calculates the score value subject to the evaluation index system, weight coefficient
and scoring standards, evaluates and ranks the above-mentioned four categories of institutions among the major market members, those
ranking high should be put on the planned list of open market operations primary dealers. The People’s Bank of China should determine
and publicize the list of the open market operations primary dealers after soliciting the opinions of the related supervising departments
on whether a dealer observes the requirements of the related supervising departments and on its business performance.
Furthermore, as for an institution that fails to perform the related obligations in open market operations, the People’s Bank of China
may suspend the transactions with this institution in accordance with the related provisions.
By the end of 2004in accordance with the above-mentioned principles and procedures, the People’s Bank of China will choose 42 commercial
banks, 4 securities companies, 4 insurance companies and 2rural credit cooperative unions, a altogether 52institutions in all, as
the open market operations primary dealers of the year 2005.
Appendix 1: Name List of the Open Market Operations Primary Dealers 2004
Appendix 2: Indices for Evaluating the Open Market Operations Primary Dealers
The Operating Office of the Open Market Operations of the People’s Bank of China
February 25, 2004
Appendix 1
Appendix 1:
Name List of the Primary Dealers of Open Market Operations 2004
|
Industrial and Commercial Bank of China |
Wuhan
Commercial Bank |
|
Agricultural Bank of China |
Jinan Commercial Bank |
|
Bank
of China |
Urumchi Commercial Bank |
|
China
Construction Bank |
Changsha Commercial Bank |
|
Bank
of Communications |
Dalian
Commercial Bank |
|
CITIC
Industrial Bank |
Zibo
Commercial Bank |
|
China
Everbright Bank |
Evergrowing Bank |
|
Huaxia
Bank |
Xiamen
Commercial Bank |
|
China
Minsheng Banking Corp., Ltd. |
Shijiazhuang Commercial Bank |
|
Guangdong Development Bank |
Qingdao Commercial Bank |
|
Shanghai Pudong Development Bank |
Kunming Commercial Bank |
|
Industrial Bank |
Taiyuan Commercial Bank |
|
China
Merchants Bank |
Xi'an Commercial Bank |
|
Shenzhen Development Bank |
Luoyang Commercial Bank |
|
Beijing Commercial Bank |
Harbin
Commercial Bank |
|
Tianjian Commercial Bank |
Hefei
Commercial Bank |
|
Bank
of Shanghai |
Guiyang Commercial Bank |
|
Nanjiaing Commercial Bank |
Baotou
Commercial Bank |
|
Guangzhou Commercial Bank |
Guotai
Junan Securities Co., Ltd. |
|
Zhuhai
Commercial Bank |
CITIC Securities Co., Ltd. |
|
Fuzhou
Commercial Bank |
China
Life Insurance Co., Ltd. |
|
Chengdu Commercial Bank |
China
Ping An Life Insurance Co., Ltd. |
|
Chongqing Commercial Bank |
Huatai
Property Insurance Co., Ltd. |
|
Shenzhen Commercial Bank |
Taikang Life Insurance Co., Ltd. |
|
Hangzhou Commercial Bank |
Rural
Credit Cooperatives Union of Beijing |
|
Wuxi Commercial Bank |
Rural
Credit Cooperatives Union of Shanghai |
Appendix 2:
Indices for Evaluating the
Primary Dealers of Open Market Operations
|
Institution Name |
Participation in Open Market
Operations |
Primary Bond Market Conditions |
|
Issuance of Central Bank Bills |
Repurchase Transactions |
Cash Bond Transactions |
Underwriting Volume |
Distribution Volume |
Hitting Frequency Ratio |
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Secondary Bond Market Conditions |
Implementation and Conduction of Monetary Policies |
|
Cash Bond Transactions |
Repurchase Transactions |
Bilateral Quotation of Bond Market- Maker |
Implementation of Window
Guidance of the Central Bank |
Daily Report on Liquidity |
Suspension of Open Market Transaction |
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