Bondarbitrage involves spotting apparently unjustified differences in the prices of bonds with similar risks and placing huge bets that the prices will revert to their normal relationship.
"The new guidelines are aimed at further tightening the oversight of the bond-issuance market and specifically cracking down on speculation and arbitrage between some investors and underwriters, " said Yang Weixue, a senior fixed-income analyst at Lianxun Securities.