China to Implement DVP Reform from December 26

On December 16th. 2022, the China Securities Regulatory Commission (CSRC) announced that China’s Delivery Versus Payment (DVP) reform will be implemented starting from December 26. In January this year, the CSRC publicly solicited market opinions on the proposed revision of the Administrative Measures for Securities Registration and Settlement that embodies the principle of DVP, in an effort to build a “standardized, transparent, open, dynamic and resilient” capital market.


DVP is an internationally adopted principle that aims to prevent the principal risk in securities and funds settlement. In closer alignment with global practices, the reform has followed the fundamental principles of DVP while taking into full account of the unique characteristics of the Chinese capital market.


The reform will keep existing practices unchanged, but use “tagging” to make securities delivery and funds payment mutually conditional and clarify default disposal arrangements. It will not have any impact on investment and trading behaviors, but will make China’s settlement system more secure, and further attract foreign capital into China’s market.


Prior to this announcement, China Securities Depository and Clearing Corporation (CSDC) has conducted a series of training sessions and system tests with market participants. Under the guidance of CSRC, CSDC will continue to work with market participants to ensure the smooth and successful implementation of the DVP reform.