The China Securities Regulatory Commission (CSRC) stepped in to regulate the situation after they were able to detect significant activity in the Chinese bond market.
Recently, the CSRC ordered domestic brokers to conduct a comprehensive compliance review of their bond trading operations due to concerns about excessive bond buying.
China's economy, weakened by a lingering real estate crisis, has pushed investors away from volatile stock markets and into bond markets, leading to increased activity.
The central bank has expressed concern over a potential bond market bubble, which could result in a crisis similar to the collapse of Silicon Valley Bank.
As a preventive measure, the CSRC has implemented a number of actions, including limiting the duration of new bond funds and requiring financial institutions to report daily changes in their long-term treasury bond positions.
In addition, large national banks have sold large amounts of Chinese government bonds to help stabilize yields.
Compliance checks are also underway on a rural commercial bank in Jiangsu province, which is suspected of bond market manipulation.
The bond market rally, which began last year, has seen huge gains, with 10-year and 30-year government bonds reaching record levels.
