China's unified bond market now comprises the inter-bank market, exchange market, and commercial bank counter market; among these, the inter-bank market serves as the principal market with more than 85% of the total bond custody balance by the end of 2021 . Bond transactions in the inter-bank market include cash bond transactions, bond repo transactions (including pledged bond repo transactions and outright transfer bond repo transactions), bond lending transactions, and bond forward transactions, of which the transaction volume of cash bond transactions and bond repo transactions accounts for more than 90%. Bond lending business has facilitated the needs of market participants to borrow bonds and improved liquidity and stability of the overall bond market. With the rapid growth of the transaction volume of bond lending business since 2015, the settlement volume of bond lending business in 2021 has increased about sixfold compared to 2015, making bond lending the third largest business in the inter-bank bond market after pledged bond repo transactions and cash bond transactions . In response to the rapid development of bond lending business and in order to further enhance regulation and market activity of bond lending business, the People's Bank of China (the "PBoC") has recently promulgated the Measures for Administration of Bond Lending Business in the Inter-bank Bond Market (the "2022 Measures"), which will take effect from July 1, 2022, and the Interim Provisions on Administration of Bond Lending Business in the National Inter-bank Bond Market (the "2006 Provisions") promulgated in 2006 will be invalidated accordingly on the same date.
