CFFEX and CCDC Signed a Cooperation Agreement on DVP for Government Bond Futures

On Jan 4, 2017, CFFEX and CCDC held in Shanghai a signing ceremony on DVP agreement of Government Bond Futures. CFFEX Chairman Zhang Shenfeng and CDCC Chairman Shui Ruqing attended the ceremony, joined by top officials from CSRC Department of Futures Supervision and Shanghai Financial Service Office, who all witnessed this event and discussed the related topics.

On the same day, CFFEX published revised “Detailed Delivery Rules of China Financial Futures Exchange for Treasury Bond Futures Contract”, and CCDC published revised “Guidelines of CCDC on Physical Delivery of Government Bond Futures”, both effective as of April 1, 2017. As envisaged, DVP method will firstly be applied to the delivery of TF1706 contract and T1706 contract, with both buyer and seller participating DVP through their depository accounts in CCDC, with the purpose of concluding a synchronous bond-fund settlement on a designated date.


As highlighted by the leaders from CFFEX, The smooth operation of physical delivery is the foundation of steady development and effective functioning of government bond market. As of the end of December 2016, all 13 government bond deliveries were successfully concluded, reflecting smooth and well-ordered bond transactions and a much desired convergence of spot and futures prices. The introduction of DVP method to government bond transaction, based on wide market consultations, successfully responds the needs of market, greatly improves the efficiency of bond and fund movement, and increases the effective supply of deliverable government bond. This initiative reflects the Exchange’s dedicated efforts in refining its services, improving market efficiency and fostering healthy functioning of financial futures markets.


CCDC, as noted by its top officials, is one of the core FMIs of China's bond market, and a central platform supporting the connection and bridging of futures and spot bond markets. As early as in 2013, the regulatory authorities empowered CCDC to provide physical delivery services for government bond futures, and set forth its relevant performance requirements. The introduction of DVP service for government bond futures aims to further implement the strategic deployment set by the authorities, and to apply in the futures bond market the good practice in spot market. This initiative is also a useful attempt to innovate the settlement service functions, which aims to further strengthen the interconnection of the spot and futures market, and to facilitate the building of the financial market infrastructure.

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