Financial regulators have tightened.....>

CHINA PRESS: Financial regulators have tightened control over financial

institutions' bond repurchase transactions in order to stem high leverage ratios

and prevent under-the-table deals, the Economic Observer reported Thursday,

citing sources with knowledge of the information. The new rules, issued by the

People's Bank of China and China's banking, securities and insurance regulators,

set caps on the outstanding volume of repo and reverse repo transactions of bond

market participants. For banks, if the outstanding volume of such transactions

exceeds 80% of their net assets, they need to report their financial data to

regulators. The cap for insurers is 20%, and 120% for securities firms, fund

houses and futures brokerages. According to the rules, financial institutions

must also sign written deals when conducting bond repo or bond forward

transactions. (Economic Observer)