Beijing is weighing the introduction of a depository receipt system in the country's bond market to direct a part of the debt currently traded on the interbank market to the domestic stock exchanges.
The National Association of Financial Market Institutional Investors, a government-backed syndicate under the central bank, is leading the feasibility studies on the planned liberalisation, according to state-run Shanghai Securities News.
The move is expected to boost bond trading on the Shanghai and Shenzhen stock exchanges, as part of Beijing's efforts to create a mammoth integrated bond market to aid fundraising by companies.
The association could not be reached for comment yesterday but two people with knowledge of the matter confirmed that such a plan is being studied.
Under the depository receipt system, bond holders transfer the debt to a custodian bank, which sells them on the stock exchanges.
The new system would help the regulators integrate the two domestic bond markets, analysts said.