FINANCE

China Cracks Down on Illicit Bond Issuance

Published: Jan. 21, 2026 4:14 p.m. GMT+8

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NAFMII.

China’s interbank bond market regulator disciplined 108 institutions last year, with more than 40% tied to illicit “structured bond issuance” schemes that inflated demand and distorted borrowing costs, according to an annual report released Monday.

The move by the National Association of Financial Market Institutional Investors (NAFMII) highlights Beijing’s stepped-up effort to rein in abusive financing practices in the world’s second-largest bond market.

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In 2023, China’s bond market regulator disciplined 108 institutions, with over 40% linked to illicit “structured bond issuance” schemes.
Structured issuance involves issuers or intermediaries using their own funds to buy bonds, falsely inflating demand and distorting costs.
NAFMII’s actions targeted issuers, trust companies, securities firms, and private fund managers, highlighting efforts to curb market abuses.

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