China interbank bond market operator says trading stable, day after data feed suspension (updated)

Compagnie Financiere Tradition SA

16/03/2023 13:18

(Rewrites the lead, add remarks from interbank platform)
       SHANGHAI, March 16 (Reuters) - The operator of China's
interbank market said market makers had provided enough
liquidity to help stabilise the $18 trillion interbank bond
market on Thursday, a day after turnover plunged following a
regulatory ban on money brokers' data feed.
    Chinese money brokers cut data feeds to vendors that provide
real-time price quotes on Wednesday after being told by
regulators to suspend their feeds, sending participants in the
world's second-biggest bond market scrambling for workarounds as
Beijing tightens its grip on data.
    The China Foreign Exchange Trade System (CFETS), a central
bank affiliate that operates China's interbank market, said that
92 market makers performed their duty to quote prices and
provide liquidity in the interbank bond market on Thursday to
aid market stability. 
    "Today, the spread level of bond market-making quotes
continued to narrow compared to the previous level," CFETS said
in a statement.
    "In the future, the Exchange will continue to organise
market makers to perform their functions and promote the
high-quality development of the interbank bond market."
    Cash bond trading in China's interbank market totalled 1.28
trillion yuan ($185.39 billion) on Wednesday, down 9% from 1.4
trillion yuan on Tuesday, according to data from CFETS, also
known as the National Interbank Funding Center.
    However, the full impact of the data restrictions could be
bigger than seen on Wednesday because turnover of some bonds is
reported on the second day of trading.
    China's interbank market accounts for about 87% of the
country's $21 trillion bond market, which also includes debt
instruments traded on stock exchanges. 
    Chinese money brokers, which include the joint ventures of
Tullett Prebon, NEX International Ltd, BGC Partners, Central
Tanshi and Compagnie Financiere Tradition, were told to suspend
their data feed by regulators, sources said on Wednesday. 
    Regulators cited data security concerns, and the fact that
money brokers are not licensed to supply data to third-party
vendors, the sources said.  
    Neither the money brokers nor their regulator, the China
Banking and Insurance Regulatory Commission (CBIRC), have
responded to requests for comment.
    Chinese bond traders have heavily relied on financial
terminals including qeubee, Wind and Dealing Matrix for
real-time price quotes, so the sudden data ban sent traders
scrambling to join QQ or WeChat messaging groups for price
information. 
    The data feed ban would make trading less efficient, and
could impact turnover, traders and data vendors have said. 

             
($1 = 6.9042 Chinese yuan renminbi)

 (Reporting by Li Gu and Brenda Goh; Additional reporting by
Samuel Shen; Editing by Jamie Freed and Susan Fenton)
 ((samuel.shen@thomsonreuters.com;  +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))