CHINA’S securities industry association has launched an investigation into a bond underwriting deal involving eight brokerages after complaints over low underwriting fees.

The Securities Association of China (SAC) said in a statement that the low underwriting fees for a recent bond sale by China Nuclear Finance Leasing Corp. raised eyebrows among market participants.

The association warned of “self disciplinary measures” if the brokerages, including Guotai Junan Securities, Haitong Securities, China International Capital Corp. and Citic Securities, are found to have violated rules in pitching for the underwriting business.

The eight brokerages bid for the undewriting business, and China Nuclear Finance on June 24 selected Guotai Junan and Citic Securities as underwriters, who agreed to charge the issuer fees at rates of 0.015 percent and 0.01 percent respectively, Shanghai Securities News reported yesterday.

The normal rate is around 0.3 percent and 0.4 percent for interbank market bonds, according to underwriters.

Other brokerages under probe include Ping An Securities, Shenwan Hongyuan, TF Securities and China Securities, according to the association.

In May, the National Association of Financial Market Institutional Investors, a bond market regulator in China, warned Citic Securities and Industrial Bank against charging bond underwriting fees way below normal levels in the market, calling this “improper competitive behavior.” (SD-Agencies)