China Ramps Up Scrutiny of Illegal Bond Trading on Bubble Risks
- NAFMII starts probe into six financial firms on violations
- Cash is stuck in debt market, not being invested in economy
China is looking into potentially illegal bond trading behavior by some financial firms, the latest sign that authorities are keen to cool speculation following a rally in the sovereign debt market.
An entity backed by the People’s Bank of China is investigating six financial institutions on alleged violation of rules when holding bonds for others or lending their trading accounts, according to a Friday statement. Some employees have “colluded” with outsiders to take advantage of lower yields and transfer benefits, the National Association of Financial Market Institutional Investors said.