SHANGHAI, Aug 24 (Reuters) – Two Chinese money brokers said that they will ensure anonymity in the bond quotation process, after traders said some in the market had been avoiding state banks as trading counterparts amid fears of regulatory scrutiny over reckless bond-buying.
Tullett Prebon SITICO (China) Ltd and CITIC Central Tanshi said late on Friday that they would strictly adhere to regulatory guidelines for anonymity and confidentiality in quotation and trading to ensure market fairness.
Market participants have said that some traders have been selecting their long-term bond trading counterparts by adding a special tag such as “no state banks” during the quotation process, an attempt to avoid revealing what they are buying or selling to state banks.
“As long as institutions trade in accordance with market principles and rule of law, the regulators will not directly intervene,” the newspaper cited an industry source as saying.
The tagging practice is hurting liquidity in the bond market, with trading volume of long-dated sovereign bonds dropping sharply since mid-August, traders have said.
The surge in China’s long-dated sovereign bonds this year was driven by investors seeking safety from a slowing economy and volatile stock markets.
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Reporting by Shanghai Newsroom; Editing by Ana Nicolaci da Costa
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