Core Viewpoint - The article discusses the ongoing efforts to regulate the underwriting and issuance processes in the interbank bond market, emphasizing the prohibition of underwriting fees below cost to combat unhealthy competition among underwriters [1][2]. Group 1: Regulatory Changes - On July 30, the China Interbank Market Dealers Association issued a notice to standardize the underwriting and issuance practices in the interbank bond market, specifically stating that "lead underwriters must not quote underwriting fees below cost" [1]. - This notice follows a previous directive in June aimed at strengthening the regulations on underwriting fees in the interbank bond market [2]. Group 2: Underwriting Fee Issues - A self-regulatory investigation was initiated against six lead underwriters for their low fee quotes in a bond project, with total underwriting service fees amounting to only 6,300 yuan [2]. - The reported fees for selected underwriters were alarmingly low, with some like China Galaxy Securities and Industrial Bank quoting estimated service fees as low as 700 yuan, raising concerns about the sustainability of such pricing practices [3]. Group 3: Market Practices - The article highlights ongoing issues in the interbank bond market, including low underwriting fees, bundled investments, and potential conflicts of interest, which have persisted despite previous regulations [4]. - The notice emphasizes the need for lead underwriters to comprehensively assess project costs and set reasonable quotes, while also encouraging early submission of subscription demands from investors [4]. Group 4: Pricing Mechanisms - The notice outlines that not only underwriting fees but also the pricing of book-building rates must be regulated, ensuring that the balance of underwriting does not crowd out effective investor subscriptions [5]. - It specifies that the interest rates should generally be determined at the upper limit of the book-building rate range [5]. Group 5: Disclosure and Distribution - The association has called for enhanced disclosure of information related to debt financing tools, particularly regarding lead underwriters' balance underwriting and self-investment, which must be disclosed in issuance announcements [6]. - There is a push to optimize the mechanism for lead underwriter syndicates during the registration and issuance phases of debt financing tools [6]. Group 6: Underwriter Selection Criteria - The notice imposes restrictions on the number of members in the underwriting syndicate based on the issuance scale, with specific limits set for different types of bonds [7]. - For short-term financing bonds, only up to two lead underwriters can be selected, while for larger issuances, the number can increase to a maximum of four [7]. Group 7: Future Regulations - The association has indicated that a dedicated management approach for underwriting quotes will be announced separately, signaling ongoing efforts to address competitive practices in the interbank bond market [8].