Chinese regulators including the central bank are soliciting feedback from market participants after the sudden suspension of commonly used bond price feeds this week, according to people familiar with the matter.
(Bloomberg) — Chinese regulators including the central bank are soliciting feedback from market participants after the sudden suspension of commonly used bond price feeds this week, according to people familiar with the matter.
The People’s Bank of China will meet with at least some major commercial banks to discuss fixed-income market development and improving the market-making mechanisms, one of the people said.Â
Regulators have had discussions internally, and have received a large number of inquiries from institutions regarding pricing quotations this week, according to one of the other people. National Association of Financial Market Institutional Investors has also solicited feedback from market participants, another one of the people said.Â
PBOC and NAFMII didn’t immediately respond to a request for comment.
An abrupt suspension of widely used bond price feeds essential to the functioning of China’s 145 trillion yuan ($21 trillion) bond market, the world’s second largest, blindsided investors Wednesday. It sent volumes in some corners of the market tumbling, reviving concern about sudden regulatory shifts in a country that makes up a growing portion of global fixed-income portfolios.
There has been no official explanation for the sudden halt in data feeds.Â
Fixed-income brokers failed to respond to requests for comment, as did the regulator, which Reuters reported earlier this week was behind the decision. Officials told some market makers to provide stability by maintaining trading volumes, narrowing bid-ask spreads and supplying quotes of corporate bonds as much as possible, Caixin reported late Wednesday, without saying where it got the information.
–With assistance from Jackie Cai, Dorothy Ma and Qingqi She.
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