Shanghai Clearing House Bond Central Counterparty (CCP) Clearing Business include Bond CCP Clearing Service, Qualified General Collateral Repo Service (QGC Repo Service), and CCP Bond Lending and Borrowing Service. For the year of 2025, the clearing volume of Bond CCP Clearing Service reached RMB 33.1 trillion, representing a year-on-year increase of 130%. A total of 109 market participants were involved in the business, including 83 proprietary participants and 26 agent participants.
Bond CCP Clearing Service refers to the process where participants submit their concluded cash bond , pledged repo , or outright repo transactions to Shanghai Clearing House for centralized clearing. Shanghai Clearing House acts as the central counterparty (CCP). Upon assuming the rights and obligations of the transaction contracts from both counterparties, Shanghai Clearing House calculates the funds receivable or payable, bonds receivable or deliverable, and bonds to be pledged or released for each bond CCP clearing member on the same settlement date on a multilateral netting basis. Concurrently, corresponding risk control mechanisms are established to ensure the smooth completion of fund settlement and bond settlement.
The QGC Repo Service refers to a type of tri-party repo transactions that clear through CCP clearing mechanisim. Participants in the interbank bond market submit bonds that meet the requirements of Shanghai Clearing House to a collateral pool. Shanghai Clearing House then performs calculations on the bonds within the collateral pool based on specified haircut rates. , Participants could conduct repo transactions via the National Interbank Funding Center (also known as CFETS) within their credit limits. When executing a QGC repo transaction, participants shall determine transaction elements including the repo amount, interest rate, and maturity, etc. The corresponding collateral bonds are automatically selected, settled, and managed throughout their life cycle by Shanghai Clearing House, including mark-to-market valuation and collateral substitution.
The CCP Bond Lending and Borrowing Service refers to a centralized security lending service that adopts CCP clearing mechanism. It is a risk prevention supporting mechanism established to satisfy the bond settlement needs of business participants and to improve the success rate of bond settlement. Shanghai Clearing House establishes an eligible borrowable bond pool based on the specific borrowable bonds designated by lenders. If the borrower has a short position on its bonds payable on the settlement day, a bond lending and borrowing instruction could be initiated through the National Interbank Funding Center. Shanghai Clearing House then automatically completes the matching and borrowing of target bonds, the management of collateral bonds, as well as the second leg settlement.
