The People's Bank of China has drafted a set of management rules for bond issuance in the interbank bond market and is now soliciting public comments, according to an official announcement.
On October 16, a financial news flash reported that, according to a PBOC notice, the central bank formulated the "Interbank Bond Market Bond Issuance Management Rules" with the aim of standardizing bond issuance practices in the interbank bond market, safeguarding market order, and promoting high-quality development of the bond market. The draft is now open for public consultation.
The public may submit feedback through the following channels and methods: 1. Send comments by email to: faxingchu@pbc.gov.cn. 2. Send comments by mail to: Financial Market Department, People's Bank of China, No. 30 Financial Street, Xicheng District, Beijing (postal code: 100033), and please mark on the envelope "Feedback on the Interbank Bond Market Bond Issuance Management Rules." The deadline for submitting feedback is November 15, 2026.
According to the drafting explanation, the Rules consist of 28 articles and strengthen the regulation of bond issuance practices from three dimensions: issuers, underwriters, and investors.
First, regulating issuers' pricing behavior. This includes prohibiting issuers from subscribing to, or subscribing in disguised form to, bonds they issue themselves, and stipulating that no person may directly or indirectly assist an issuer in subscribing to, or subscribing in disguised form to, its own bonds. It prohibits issuers from interfering with investors' subscription decisions or disrupting pricing through rebates and other means. It clarifies the pricing requirements for different bond issuance methods and encourages issuers to optimize the mechanism and criteria for selecting underwriting institutions, thereby improving the quality of bond underwriting services.
Second, regulating underwriters' underwriting behavior. This includes prohibiting low-price underwriting and stipulating that underwriting fees must not be significantly lower than the fair industry level. It prohibits advance commitments on bond bid prices or issuance prices (interest rates), regulates practices such as firm-commitment underwriting and proxy bidding and payment, strengthens internal control requirements for underwriters regarding conflicts of interest and information barriers, and enhances market-based constraint mechanisms such as information disclosure.
Third, regulating investors' subscription behavior. This includes prohibiting investors from submitting false bids, from deliberately submitting large-volume bids and then canceling them in order to disrupt bond issuance prices (interest rates) and allocation, and from bidding at prices significantly below fair market prices for the purpose of interfering with pricing. The Rules also set out clear prohibitions on insider trading, tunneling of benefits, and other such conduct.
Fourth, regulating issuance processes such as bookbuilding. Bookbuilding venues are required to be capable of recording the full process of all price inquiries, adjustments, and pricing decisions, and to produce tamper-proof records for ex-post verification.
Fifth, strengthening supervision and management of the issuance pricing process. The Rules make clear that the People's Bank of China supervises and manages bond issuance in the interbank bond market. They establish a closed-loop management mechanism comprising frontline monitoring, self-regulatory management, administrative supervision, and unified law enforcement. They specify that the People's Bank of China and its branches may adopt regulatory measures such as ordering rectification and conducting regulatory talks, and may impose administrative penalties on illegal and non-compliant conduct in accordance with the law. They also strengthen coordination between administrative and criminal enforcement, transferring suspected criminal conduct to judicial authorities for criminal liability in accordance with the law.
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