On November 2, 2026, the People's Bank of China issued a notice stating that in order to support the healthy and stable development of the capital market, it would carry out Securities, Funds, and Insurance Companies Swap Facilitation (SFISF) operations on November 3, 2026. The swap period is one year, with the possibility of extension depending on circumstances; so far, 31 securities and fund companies have declared their interest, with a total intended declaration amount exceeding 100 billion yuan. This is the third time such operations have been conducted since the creation of this tool, and it represents another timely and clear statement by financial regulatory authorities amidst recent market fluctuations, sending a clear and positive policy signal to the market.
It is reported that the Securities, Funds, and Insurance Companies Interchange Facility ( SFISF ) is a structural monetary policy tool introduced in China in October 2024 to support the capital market. Its core mechanism allows eligible securities, funds, and insurance companies to use assets such as bonds, stocks ( ETF ), and CSI 300 constituent stocks as collateral to exchange for high-grade liquid assets from the central bank, with the funds obtained being specifically used for investment in the stock market. This "bond-for-bond" arrangement enables institutions to enhance their ability to obtain funds and increase their stock holdings without injecting base money or altering the prudent tone of monetary policy. By revitalizing existing institutional assets, it guides additional funds into the market in an orderly manner, reflecting the precise and targeted nature of structural monetary policy tools.
Ping An Securities analysis pointed out that there are three important changes in the arrangement of this SFISF mechanism. First, the scope of participation has expanded. The number of participating institutions has increased from 20 to 31, covering not only leading firms but also more mid-sized securities companies and public funds, which helps to alleviate the liquidity stratification within non-bank institutions. Second, costs are expected to continue to decrease. The winning bid rates for the previous two operations have been reduced from 20 basis points to 10 basis points, and a symposium on swap facilitation held on the same day further proposed to appropriately lower swap rates and optimize pledge and operation models. Third, demand has clearly increased. The amount declared this time is close to the combined scale of the previous two operations (50 billion yuan and 55 billion yuan), reflecting a significant increase in institutions' recognition and willingness to use this tool. In addition, the People's Bank of China, the China Financial Regulatory Commission, and the China Securities Regulatory Commission held a symposium on two tools to support the capital market on the same day, clarifying that stock repurchase and additional lending arrangements will shift from temporary to long-term institutionalized measures, and the lending rate will be reduced from 1.25% to 1%. These multiple measures work together to further enhance the policy synergy effect.
"The facilitation of this swap operation has been further enhanced, which is not only a timely measure in response to the current market situation but also a long-term strategy to improve the fundamental systems of the capital market and enhance its inherent stability. The policy will have a positive impact on the capital market at multiple levels," Ping An Securities further noted. First, it directly replenishes institutional liquidity, bringing in additional funds. The swap facility provides institutions with a low-cost source of funds specifically for stock investment, which helps to improve the short-term liquidity structure of the market, enhances the market's capacity to absorb shocks, and boosts market sentiment. Second, it strengthens policy expectations and stabilizes market confidence. Against the backdrop of a complex and volatile external environment and increased market fluctuations, the central bank's timely initiation of the swap facility sends a clear signal to maintain the stable operation of the market, which helps to stabilize investors' expectations. The active participation of institutions itself also demonstrates professional investors' firm confidence in the long-term prospects of China's capital market. Third, it improves the long-term stability mechanism, which is of profound significance. The swap facility complements other policy tools such as stock repurchases and re-lending, working together to build a multi-level, three-dimensional support system for the stability of the capital market. As these tools evolve from emergency arrangements to regular mechanisms, China's capital market now has a more substantial policy reserve to address risk challenges, and the resilience of the market has significantly increased.
At the same time, reporters learned that as one of the important participants in the capital market, Ping An Securities has also actively responded to the policy call this time, actively participating in swap facilitation business operations to support the healthy and stable development of the capital market.
"After becoming aware of the relevant policies, the company promptly implemented arrangements for the facilitation of swap business, established a special working group, and comprehensively and solidly promoted the development of the business, covering the entire process of asset swaps, inter-bank mortgage financing, collateral management, and fund investment operations, to ensure that the business is carried out efficiently and in compliance with regulations," Ping An Securities told reporters. After years of development, the company has formed a relatively complete trading system and business operation framework, and has accumulated rich experience in strategy implementation, transaction execution, risk management, and compliance control. It has gradually established systematic and professional trading and risk management capabilities, achieving an effective connection from trading system support to business operation management, and has formed a strong comprehensive business capability and a foundation for sustainable development. Currently, Ping An Securities has the necessary staffing, business processes, technical systems, and collateral preparations in place to ensure the rapid and smooth operation of the swap facilitation business.
In terms of configuration, Ping An Securities stated that it will combine market conditions and regulatory guidance to use the swap facilitation financing quota in batches, increase the allocation of equity assets such as stocks and ETF, fully leverage the role of "patient capital" and "ballast stone," and work together with regulatory authorities to contribute to maintaining the stability of the capital market and boosting investor confidence.
"We are full of confidence in the long-term development of the capital market and firmly believe that with policy guidance and the joint efforts of all parties in the market, the foundation for the long-term and healthy development of the capital market will become even more solid, and the future prospects are promising."
The convenience of exchange is realized through signal release, financing support, and targeted investment; historical performance of the stock market provides correlative evidence for its role in promoting market recovery.
The institution believes that in the short term, the market bottom can be seen based on the external factors this week, while in the medium term, it will be determined by the end of this year and the beginning of next year.
"Confidence boosts sentiment, the funding situation is improving, and market recovery is on the way."
Boosted by the news from the financial sector's market stabilization symposium, the A-share market rebounded across the board on November 2nd. In the evening, the People's Bank of China announced that it had held symposiums on securities, fund, and insurance company swap facilitation, as well as on stock repurchase and additional lending policies, in conjunction with the Financial Regulatory Administration and the China Securities Regulatory Commission (CSRC). On the same day, the PBOC declared that it would carry out the third batch of securities, fund, and insurance company swap facilitation operations, and that the stock repurchase and additional lending policy would be transformed from a temporary arrangement to a long-term institutional one, with the lending rate reduced to 1%. Subsequently, the CSRC reported that additional funds were also beginning to flow into the market.
The special reloan for stock repurchase and share increase has been transformed from a phased arrangement to a long-term institutional arrangement, with the interest rate reduced from 1.25% to 1%.
