Core Viewpoint - The China Interbank Market Dealers Association issued a notice on June 16 to strengthen the norms for issuance and underwriting in the interbank bond market, emphasizing market-oriented principles and fair treatment of all investors [1][2]. Group 1: Issuance and Underwriting Regulations - Issuers and underwriting institutions must conduct issuance and underwriting according to market principles, ensuring fair treatment of all investors and prohibiting pre-agreed bond issuance rates [1]. - Underwriting institutions are prohibited from distorting market prices through "rebates" and must not engage in improper benefits through practices like holding bonds on behalf of others [1]. - Lead underwriters must protect investors' legitimate rights and cannot use underwriting as a means to attract clients [1]. Group 2: Balance Underwriting and Pricing - Balance underwriting must be conducted with fair pricing and compliance with procedures, adhering to the interest rates disclosed in issuance documents [1]. - Balance underwriting should not crowd out effective subscription sizes from investors, and the balance underwriting rate must not be lower than the upper limit of effective subscription rates [1]. Group 3: Compliance and Monitoring - Underwriting institutions are not allowed to quote below cost for underwriting fees when participating in bond project bidding [1]. - Issuers and underwriting institutions must fulfill payment obligations as per commercial agreements and cannot refuse or delay payments [1]. - Investors are prohibited from assisting issuers in "self-financing" and must not engage in insider trading, market manipulation, or other illegal activities [1]. Group 4: Self-Regulation and Enforcement - The Dealers Association will implement self-regulation in the interbank bond market, regularly monitoring issuance and underwriting activities and conducting market evaluations [2]. - Violations of self-regulatory rules and the notice will result in self-regulatory measures or penalties, and serious violations will be referred to relevant authorities for further action [2].

Core Viewpoint - The regulatory body emphasizes the need to rectify and standardize the bond issuance and underwriting process in the interbank bond market, addressing issues such as low underwriting fees and price manipulation [1][2]. Group 1: Regulatory Measures - The China Interbank Market Dealers Association issued a notification to strengthen the self-regulation of bond issuance and underwriting, responding to market concerns about low-price underwriting and other irregularities [1][2]. - The notification mandates that issuers and underwriters must conduct issuance and underwriting based on market principles, ensuring fair treatment of all investors and prohibiting pre-agreed bond issuance rates [2][3]. - Underwriters are required to ensure that their underwriting practices do not compromise investor rights and must quote fair prices for balance underwriting, which should not undercut effective subscription rates [2][3]. Group 2: Market Practices - The prevalence of low-price underwriting has distorted market pricing and led to a chaotic order in bond underwriting, with a focus on business development over compliance management [2][3]. - Some underwriters engage in low-price underwriting to secure more business opportunities, particularly with high-quality issuers, which can lead to conflicts of interest [5][6]. - The association has been monitoring the bond issuance and underwriting business regularly and has implemented self-discipline measures against violators [3][6]. Group 3: Evaluation and Support - The association has introduced a comprehensive evaluation system for underwriters, assessing their market coverage, business capability, and compliance, with results categorized into grades A, B, C, and D [3][4]. - Prominent underwriters such as CITIC Securities and Industrial and Commercial Bank of China have been recognized for their outstanding capabilities in the bond issuance process [4]. - The regulatory environment is shifting towards encouraging underwriters to enhance their operational capabilities rather than merely focusing on scale [6][7].

Core Viewpoint - The China Interbank Market Dealers Association has issued a notice to strengthen the regulation of bond issuance and underwriting practices in the interbank bond market, addressing issues such as low underwriting fees, price distortion, and improper benefits [1][2]. Group 1: Regulatory Measures - The notice outlines four main areas for regulating the behavior of issuers and underwriters, emphasizing market-based principles and fair treatment of all investors [2]. - Issuers and underwriters are prohibited from pre-agreeing on bond issuance rates and using "kickbacks" to distort market prices [2]. - Underwriters must ensure that underwriting fees are not quoted below cost and must fulfill payment obligations as per commercial agreements [2]. Group 2: Self-Regulation and Monitoring - The association will implement self-regulation in the interbank bond market, regularly monitoring issuance and underwriting activities, and will take disciplinary actions against violations [3]. - Violations of self-regulatory rules may lead to disciplinary measures, and serious legal violations will be referred to relevant authorities [3]. Group 3: Recent Disciplinary Actions - In 2024, the association imposed disciplinary actions on 88 instances involving 47 institutions and 41 individuals for minor violations, with ongoing investigations into several institutions suspected of non-market-based issuance [4]. - The association is particularly focused on violations in the primary issuance of bonds, including structured bond issuance and interference with issuance rates [4]. Group 4: Market Performance - As of June 16, 2024, a total of 87 commercial banks have underwritten bonds amounting to 69,897 billion yuan, with a significant increase in both the amount and number of bonds underwritten compared to the previous year [6][7]. - The underwriting amount has increased by approximately 8,868 billion yuan, representing a growth of 14.53%, while the number of bonds underwritten has risen by 4,249, marking a 29.19% increase [7]. - Major state-owned banks dominate the market, with China Bank leading at 7,224 billion yuan in underwriting, followed by Industrial and Commercial Bank and China Construction Bank [7]. Group 5: Impact of Regulatory Evaluation - Regulatory evaluations will directly affect banks' underwriting qualifications and market shares, with institutions rated D for two consecutive years facing disqualification from business [8].

Core Viewpoint - The notice issued by the trading association aims to regulate market order and enhance self-discipline in the interbank bond market, addressing issues such as low underwriting fees, low underwriting, syndicate investments, and interest transfer [1] Group 1: Market Regulation - Issuers and underwriting institutions (including lead underwriters and underwriters) are required to conduct issuance and underwriting based on market principles, treating all investors fairly [1] - It is prohibited to pre-agree on bond issuance interest rates or distort market prices through methods such as "rebates" [1] - Underwriting institutions are not allowed to quote underwriting fees below cost when participating in bond project bidding [1] Group 2: Payment Obligations - Issuers and underwriting institutions must fulfill payment obligations according to commercial agreements and are not allowed to refuse payment or delay fees [1]