On July 13, SZSE released the Business Guidelines for Innovative Corporate Bonds No. 1 - Green Corporate Bonds (Revision 2021) and the Business Guidelines for Innovative Corporate Bonds No. 3 - Rural Revitalization Corporate Bonds (Revision 2021). The business guidelines have included carbon neutrality bonds, rural revitalization bonds, etc. into the existing types of innovative corporate bonds and further defined the issuance conditions, purposes of raised funds and requirements on application materials, refining the system of rules for fixed income products. It is an important measure of SZSE to earnestly implement the decisions and plans of the CPC Central Committee and the State Council, unswervingly apply the new development philosophy, actively give play to the functions and product advantages of exchange-traded bond market, and better serve national strategies such as green development and rural revitalization.
The Business Guidelines for Innovative Corporate Bonds No. 1 - Green Corporate Bonds (Revision 2021) aims to support enterprises’ low-carbon development more effectively, facilitate the adjustment and optimization of the industrial structure and the energy structure, and help realize the goals of peaking carbon dioxide emissions and achieving carbon neutrality. In the business guidelines, SZSE has made the following main revisions. First, SZSE has further made it clear that the funds raised from the issuance of green corporate bonds should be used in the business development in green industries and fields. In the meantime, SZSE has encouraged issuers to add terms linked to their fulfillment of environmental benefit targets, such as overall carbon emission reduction, in their prospectuses. Second, SZSE has laid down requirements on carbon neutrality bonds, stating that the raised funds should be mainly used in carbon neutrality related projects such as clean energy, clean transportation, sustainable buildings, industrial low-carbon transformation and other projects with carbon emission reduction benefits, and that the full names of such bonds may use the mark of “carbon neutrality green corporate bond”. Third, SZSE has added relevant requirements on blue bonds, saying that the full names of the green bonds whose proceeds are mainly used to support projects concerning marine protection and sustainable utilization of marine resources may add the “(blue bond)” mark.
To improve the pertinency and operability of rules, facilitate the formation of market-based, sustainable business models, assist in consolidating the achievements in the battle against poverty, and serve rural revitalization, SZSE has revised the original Business Guidelines for Innovative Corporate Bonds No. 3 – Poverty Alleviation Corporate Bonds into the Business Guidelines for Innovative Corporate Bonds No. 3 - Rural Revitalization Corporate Bonds (Revision 2021). In the new business guidelines, first, SZSE has specified the issuance terms of rural revitalization corporate bonds, requiring that the issuer’s registered address should be in regions that were lifted out of poverty in the past five years, and its proceeds from issuance should be mainly used to support rural revitalization related fields or to build, operate or acquire relevant projects in rural revitalization fields or repay project loans. Second, SZSE has set the use ratio of raised funds, saying that the amount of funds invested in projects relating to rural revitalization fields should be no less than 70% of the total amount of raised funds. Third, SZSE has detailed the scope of rural revitalization fields to be supported, which includes supporting the development of characteristic rural industries in regions that have been lifted out of poverty, promoting stable employment of people who have shaken off poverty, improving the infrastructure conditions in regions that have been lifted out of poverty, and raising the level of public services in regions that have been lifted out of poverty, as well as optimizing the employment structure in rural areas, refining the rural industrial system, improving the rural infrastructure, etc. through market-oriented and law-based methods.
Since 2016, SZSE has launched various special bonds under the corporate bond framework. By issuing notices on relevant pilot business projects, Q&A and business guidelines and standardizing access criteria and information disclosure requirements, SZSE has made precision hard work in many respects of economic and social development including green development, rural revitalization, scientific and technological innovation and opening up. Next, centering on the goal of “building a standard, transparent, open, dynamic, and resilient capital market”, SZSE will adhere to the general principle of making progress while ensuring stability. We will leverage the opportunities in the new development stage, fully apply the new development philosophy, and actively foster the new development pattern. We will continue to promote the innovation in fixed income products and improve the system of rules for innovative varieties, to strengthen the institutional foundation of the capital market. We will establish and improve the green financial services system, assign special personnel to review innovative fixed-income products, and focus on improving review and service efficiency. We will give full play to the role of the capital market as a hub to assist in the effective transition from poverty alleviation to rural revitalization, so as to better serve national strategies and economic and social development.
