Core Viewpoint - The article emphasizes the importance of understanding the concept, application scenarios, and risk characteristics of yield swaps as a significant financial tool in the capital market, aiming to enhance market participants' knowledge of this complex instrument [1]. Group 1: Regulatory Framework - The China Securities Regulatory Commission (CSRC) oversees the over-the-counter derivatives market, with the China Securities Association and the China Futures Association responsible for self-regulatory management of securities and futures companies' yield swap businesses [2]. - Only primary and secondary dealers recognized by the CSRC can engage in yield swap transactions, while unqualified securities companies can only conduct swaps for proprietary purposes with dealers [3]. Group 2: Counterparty Requirements - Yield swap counterparties must have genuine needs for asset allocation and risk management, meeting the standards for professional institutional investors as per the relevant regulations [4]. - Professional institutional investors include approved financial institutions, various asset management products, and certain funds such as social security and charity funds [5][6]. Group 3: Types of Participants and Their Objectives - The domestic yield swap market primarily involves licensed financial institutions, financial products, and general corporate entities, with different objectives such as asset allocation and risk management [7]. - Table 1 outlines the main types of participants and their objectives, indicating that licensed financial institutions engage in self-proprietary trading and risk management, while financial products focus on asset allocation and risk control [8].