China and the world’s largest bank in terms of assets is under investigation for improprieties in relation to its activities on the interbank bond market.
On April 4th, the National Association of Financial Market Institutional Investors (NAFMII) announced that daily monitoring work had uncovered significant deviations from reasonable market levels in the pricing of multiple debt instruments underwritten by Industrial and Commercial Bank of China (ICBC).
According to NAFMII, these deviations had “disrupted the market order and are suspected of violating relevant regulations for self-disciplinary management of the interbank bond market.”
NAFMII has since launched a self-disciplinary investigation into ICBC in accordance with the “”Interbank Bond Market Self-disciplinary Punishment Regulations” (银行间债券市场自律处分规则), as well as launched investigations into other lead underwriters.
“If violations of relevant management rules for registration and issuance are found, self-disciplinary sanctions will be imposed in accordance with procedures,” NAFMII said.
Founded in September 2007 under the auspices of the State Council, NAFMII is considered the peak body for China’s over-the-counter (OTC) financial markets, covering the Chinese interbank bond market, interbank lending market, foreign exchange market, commercial paper market and gold market.