To promote the development of the asset securitization business, following the administration rules and supporting regulations of asset securitization business issued by the China Securities Regulatory Commission, the Shanghai Stock Exchange (SSE) today issues the “SSE Business Guidelines for Asset Securitization” (the “Guidelines”), which specifies the details in issues including listing and transfer, suitability for investors, and information disclosure of the assets-backed securities (ABS).
The “Guidelines” mainly specifies the following issues.
First, the “Guidelines” specifies the principle requirements and application procedures for listing and transfer. Managers should confirm whether the conditions for listing and transfer have been met before the ABS are issued according to the “Guidelines”, as well as ensure sound business linking-up.
Second, the “Guidelines” strengthens management on suitability for investors, and specifies the scope of qualified investors.
Third, the “Guidelines” stipulates the requirement on information disclosure in issuance of the ABS and their period of duration, in order to enhance market transparency.
Fourth, the “Guidelines” clarifies the risk control measures and continuing obligations in all business links of asset securitization, with a view to protecting legal rights and interests of investors.
Fifth, the “Guidelines” specifies that, in addition to transfer of spot goods, collateralized repo could be applied for the ABS according to the relevant regulations of the SSE.
According to head in charge of relevant business of the SSE, as asset securitization is an important part of the bond market, the SSE regards sound development of the bond market as one of its key strategies.
Over recent years, the SSE’s bond market has been developing rapidly in general. There are 2,533 bonds of various types now being listed, with stock amount being RMB2.26 trillion, and the trading volume of spot goods and repurchase being RMB75 trillion this year. Beside, the SSE has always attached great importance to development of the asset securitization business, and set up a special team to promote the asset securitization business. The SSE has kept close ties with the enterprises and market institutions, in a bid to promote development of asset securitization business.
Presently, the basic asset types of the listed products include creditor's rights of lease, fee-charging rights of infrastructure, enterprise receivables, and entrusted loans. In June this year, credit-asset-backed securities were listed at the SSE for the first time. After the filing system was newly adopted for the asset securitization business, the market for asset securitization will expect rare opportunities for development.
Under the guidance of relevant regulatory authorities, the SSE, centering on development of the asset securitization market, will carry out tasks in the following 3 aspects:
First, when products are concerned, the SSE, according to the requirements for decentralizing authority, will accelerate launch of securitization products of main-category basic assets with the joint efforts of market participants to promote innovative development of the market.
Second, in terms of market organization and building supporting systems, the SSE will provide one-stop services for issuance and listing of asset securitization products, continue to improve market publicity, incubation, and innovation work, as well as seek to solve problems in law, accounting, tax, and change of mortgage and pledge involved in the process of carrying out asset securitization business through coordination.
Third, with a view to liquidity of the secondary market, development of the asset securitization business needs to be based on a bond market with certain width and depth. For all this, the SSE will further improve the trading and settlement mechanism, expand diverse investor groups, and launch collateralized agreed repo of bonds in the near future, in a bid to provide a rich variety of repo financing instruments for an array of fixed-income products including asset securitization products.