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In order to implement the decisions and plans of the CPC Central Committee and the State Council on accelerating the development of government-subsidized rental housing and in accordance with the requirements of the China Securities Regulatory Commission and the National Development and Reform Commission on relevant work, the SSE issued and implemented the Guidelines of Shanghai Stock Exchange on the Application of the Rules for Publicly Offered Infrastructure Real Estate Investment Trusts (REITs) No. 4 - Government-subsidized Rental Housing (for Trial Implementation) (hereinafter referred to as the Guidelines) on July 15, 2022, to standardize and guide the pilot issuance of Infrastructure REITs for government-subsidized rental housing.
First, the SSE helps revitalize the stock assets for government-subsidized rental housing and promotes a virtuous cycle of investment and financing. The SSE clearly states that the net recovered funds should be given priority to the construction of government-subsidized rental housing to expand the source of funds for such projects. It also clarifies that the operation period should be determined flexibly for the projects that meet the listing requirements of infrastructure funds and market expectations, ensure controllable risks and have long-term stable returns.
Second, the SSE promotes the specialized development of government-subsidized rental housing. The SSE requires fund managers and operation management institutions to formulate appropriate operation and management mechanisms in accordance with national policies related to government-subsidized rental housing to improve operation efficiency. It also strengthens the information disclosure requirements concerning the identification basis, historical operation data and other specific information of government-subsidized rental housing.
Third, the SSE adheres to the principle that "housing is for living in, not for speculation" and strictly implements the real estate regulation and control policy and requirements. The SSE clarifies that the original equity holders should be independent legal entities and shall not raise funds for non-rental housing and other real estate development projects in the name of rental housing, or evade the real estate regulation and control requirements. It further clarifies the business isolation requirements for the original equity holders whose controlling shareholders or affiliated parties are involved in commercial housing or commercial real estate development.
Fourth, the SSE stresses recovered funds management and consolidate the participants' responsibilities. The original equity holders whose controlling shareholders or affiliated parties are involved in commercial housing or commercial real estate development shall establish and implement the recovered funds management system, carry out strict closed-loop management, and sign a supervision agreement on recovered funds with related parties, to prevent such funds from flowing into commercial housing and commercial real estate development. It further clarifies that for the original equity holders of Infrastructure REITs of other fields, if their controlling shareholders or affiliated parties are involved in the commercial housing or commercial real estate development, the Guidelines shall be referred to for the requirements of recovered funds management.
The issuance of the Guidelines is an important measure for the SSE to actively promote the steady and healthy development of the REITs market and support the construction of the government-subsidized rental housing market through financial support. Next, the SSE will, in accordance with the unified deployment of the China Securities Regulatory Commission, steadily promote the pilot REITs of government-subsidized rental housing, help the industry to build a new development model, and promote the establishment of a housing system that ensures supply through multiple sources, provides housing support through multiple channels, and encourages both housing purchase and renting.
