BEIJING, June 21 (Xinhua) -- National Association of Financial Market Institutional Investors (NAFMII) released on Tuesday a circular to further strengthen specification over bond issuance business on the interbank bond market, effective from July 1, reported Xinhua Finance.
NAFMII, a self-regulation organization under the Chinese central bank aiming to propel development of China's over-the-counter (OTC) market, said the new circular shall prevail when its articles run against or differ from content of a similar circular issued previously.
NAFMII stressed that bond issuers on the interbank market shall actively uphold the fair competition-based market order and are prohibited to intervene via comprehensive business cooperation in bond pricing at issuance or violate market-oriented principles and rules to pin down the issuing yields or prices of bonds.
Interbank market bond issuers are also required to abide by the market-oriented principles to set rationally the appraising indicators for comparison-based selection of underwriters and such indicators shall not be pegged directly or indirectly to the issuing yields or prices of bonds and affect the market-oriented formation mechanism of the issuing prices of bonds.
Bond underwriting-related business of underwriters such as underwriting deal attraction and undertaking, bond issuance and bond sales, shall be effectively separated from their investment transactions, interbank business, and deposits and lending business to fend off potential interests conflict with other business.
Moreover, the circular requires interbank market bond issuers to be prudent in making decisions of adjusting the book-keeping interest rates or prices band and if an adjustment is necessary, the timing shall be no later than one hour before the ending time of the book-keeping.
After adjustment, ceiling of the book-keeping interest rates band shall not be lower than the upper limit of interest rates of effective subscriptions. Adjustment of book-keeping interest rates or prices band on basis of non-market-oriented exclusive underwriting is also banned in the circular. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
A single purchase
