Chinese money brokers promise anonymity in bond quoting By Reuters

SHANGHAI (Reuters) – Two Chinese money brokers said they would ensure anonymity in the bond quoting process after traders said some in the market had shunned state banks as trading counterparts amid fears of regulatory scrutiny over imprudent bond buying.

Tullett Prebon SITICO (China) Ltd and CITIC Central Tanshi said on Friday evening that they will strictly adhere to regulatory guidelines for anonymity and confidentiality in quotations and transactions to ensure market fairness.

Market participants said some traders selected their long-term bond trading counterparts by adding a special tag such as “no state-owned banks” during the quoting process, an attempt to avoid disclosing what they were buying or sell to state banks.

This comes as Chinese authorities have stepped up scrutiny of brokers’ and banks’ bond trading and stepped up warnings about the risk of reckless bond buying in recent weeks – moves that appear to have halted a long and frenzied rise in bonds.

But Financial News, which is backed by the People’s Bank of China, on Saturday rejected claims that the central bank would intervene in the market through administrative measures.

“As long as institutions trade in accordance with market principles and the rule of law, regulators will not intervene directly,” the paper quoted an industry source as saying.

The labeling practice is affecting liquidity in the bond market, with trading volume in long-dated sovereign bonds falling sharply since mid-August, traders said.

The rise this year in China’s long-term sovereign bonds has been driven by investors seeking safety from a slowing economy and volatile stock markets.