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In order to carry out the relevant requirements of the Securities Law for the implementation of the registration-based issuance system for corporate bonds, and accomplish the overall work arrangements of the State Council and the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) issued the Guidelines of Shanghai Stock Exchange for Application of Issuance and Listing Review Rules for Corporate Bonds No. 1 - Application Documents and Compilation (the “Guidelines for Application Documents and Compilation” for short) and the Guidelines of Shanghai Stock Exchange for Application of Issuance and Listing Review Rules for Corporate Bonds No. 2 – Specific Corporate Bond Types (the “Guidelines for Specific Bond Types” for short), which mark the initial results achieved by the SSE in improving the rules for issuance and listing review under the registration-based issuance system for corporate bonds.
The new Securities Law came into effect on March 1, 2020, stipulating the implementation of the registration-based issuance system for public offering of corporate bonds. The CSRC further requires that the stock exchanges should be responsible for accepting and reviewing the public offering of corporate bonds, and should also clarify the review standards, review procedures, document submission, operation procedures and other matters. After the implementation of the registration-based issuance system, the SSE has informed the market in a timely manner of the arrangements for the transition period to the registration-based issuance system through notifications, Q&A and other means, thoroughly reviewed and evaluated the existing systems and rules on the basis of summarizing the experience in pre-review, and initiated the efforts in revising, improving, merging, integrating and streamlining some business rules, notices, guides and regulatory Q&A documents, so as to further enhance the transparency and standardization of the content and procedures of review, and improve the system of rules for issuance and listing review of corporate bonds.
The two sets of guidelines for application of rules formulated this time mainly clarify the review standards and information disclosure requirements for the issuance and listing of corporate bonds after the implementation of the registration-based issuance system, and will play an important role in regulating and guiding the conduct of market participants. The Guidelines for Application Documents and Compilation mainly clarify the requirements in information disclosure and in the examination by intermediaries in the process of preparing application documents for corporate bonds, and generally adopt the content of the existing guides for pre-review of application documents and compilation, with revision, improvement and elaboration made on the basis of the revisions of the Securities Law, the requirements of the registration-based issuance system and related regulatory practice. The Guidelines for Specific Bond Types mainly regulate the relevant implementation arrangements for the specific bond types that have special terms attached or serve national strategies, covering the regulatory standards and requirements for information disclosure and examination for the 6 specific bond types, namely, short-term corporate bonds, renewable bonds, green bonds, poverty alleviation bonds, innovation and entrepreneurship bonds and relief bonds, which will be revised from time to time according to market developments, possibly adding requirements for other specific bond types.
Since the implementation of the registration-based issuance system, under the unified leadership of the CSRC, the SSE has upheld the role of the market and the rule of law, put equal emphasis on promoting development and preventing risks, further strengthened the information disclosure-centered approach to review, and continuously improved and upgraded the review of capital raising through corporate bonds, focusing on enhancing the efficiency and quality of review, optimizing systems and rules, and other aspects. Up to now, the SSE has accepted a total of 584 applications for public issuance and listing of corporate bonds, with 384 registered and put into effect, showing standardized and efficient operation of the issuance review and registration of corporate bonds. So far, the whole process of issuance and listing review of corporate bonds has gone electronic at the SSE, and the SSE has implemented categorized review according to the risk characteristics of the companies, and continued to improve the quality of inquiries during review. In addition, since the implementation of the registration-based issuance system, the SSE has actively explored product innovation in corporate bonds to better serve the real economy and national strategies: launching the pilot program of short-term corporate bonds to meet the needs of high-quality companies in liquidity management and investors’ demand for diversified allocation; supporting companies in issuing corporate bonds for epidemic prevention and control to facilitate the companies’ resumption of work and production; broadening the scope of use of the funds raised from relief bonds, expanding the targets of relief from listed companies to non-listed companies, and helping small and medium-sized companies and private enterprises out of the difficulties in financing and liquidity; and further supporting the development of specific types of corporate bonds that serve the national strategies, such as green corporate bonds, innovation and entrepreneurship corporate bonds and poverty alleviation corporate bonds. According to statistics, since the beginning of this year, the issuance size of specific types of corporate bonds on the SSE market has reached nearly RMB700 billion, and the bonds have played an important role in implementing the vision of innovative, coordinated, green, open and shared development for the 13th Five-year Plan, supporting epidemic prevention as well as resumption of work and production, advancing innovation-driven development, and carrying out the arrangements for winning the battle against poverty.
Going forward, the SSE will continue to earnestly implement the requirements of “building the system, non-intervention, and zero tolerance”, thoroughly practice the concept of registration-based issuance system centered on information disclosure, constantly improve the transparency of the review, enforce the responsibilities of intermediaries, consolidate the risk prevention and control mechanism under the registration-based issuance system, strengthen the issuance review mechanism for corporate bonds under the registration-based issuance system, and further enhance the capacity of the corporate bond market to support the real economy.
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