Core Viewpoint - The recent notice issued by the China Interbank Market Dealers Association aims to regulate the bond issuance market by addressing issues such as price distortion, risk mismatch, and resource imbalance, which have long plagued the industry [1][4]. Group 1: Market Competition and Practices - The bond issuance market is experiencing intense competition, leading to the widespread use of "rebates" as a hidden incentive among institutions to secure project resources and maintain client relationships [2][6]. - "Rebates" involve underwriting institutions providing economic compensation to investors or issuers during the bond issuance process to promote sales or obtain underwriting qualifications [2][6]. - Some leading underwriters have been reported to offer significantly low underwriting fees, even engaging in "loss-leading" practices to win bids for high-quality projects, which has forced smaller institutions to withdraw from the competition [3][5]. Group 2: Regulatory Measures - The notice clearly delineates regulatory boundaries, prohibiting price manipulation, low-cost underwriting, and other unethical practices, aiming to restore a fair competitive environment in the bond market [4][5]. - It emphasizes that both issuers and underwriters must adhere to commercial agreements regarding payment obligations, thereby curbing the practice of underbidding [5][6]. - The association plans to enhance self-regulation by establishing monitoring mechanisms and conducting regular evaluations of institutional behavior, with severe penalties for serious violations [5][6]. Group 3: Market Efficiency and Long-term Impact - The long-standing existence of "rebates" reflects a non-market-based incentive mechanism influenced by various factors, including the competitive landscape among issuers and underwriters [6][7]. - The notice is expected to guide underwriters back to a competition model focused on pricing and sales capabilities, reducing irrational low-cost underwriting behaviors and improving market pricing accuracy [8]. - As the issuance mechanism becomes more standardized, the financing environment for high-quality issuers is likely to improve, leading to enhanced market resource allocation efficiency [8].