The People's Bank of China ("PBC") recently issued the Administrative Measures for the Bond Lending Business in the Interbank Bond Market (the "Measures") for implementation from July 1, 2022. 

The Measures improve the bond lending rules from the perspectives of market players, performance assurance and master agreement, involving supporting market players to carry out the centralized bond lending business in a standardized way, and raising the efficiency and flexibility of bond lending transaction. Meanwhile, to strengthen risk prevention, the Measures set forth relevant requirements on large-value loan reporting and disclosure, risk monitoring, self-discipline management and other matters. Among others, the Measures stipulate that in the event of a default in bond lending, both the bond lender and the borrower shall take disposal measures in accordance with the relevant terms of the master agreement, or apply for arbitration, or file a lawsuit with the people's court, and shall send the final result to the trading platform and bond settlement service institution before 12:00 on the next working day upon receiving the effective arbitration award or litigation judgment.

(Source: People's Bank of China)