Shanghai Stock Exchange Publishes Rules For Insurance Asset Management Companies To Conduct Asset-backed Securities Business And Further Improves The Quality And Efficiency Of Bond Market's Services For The Real Economy

In order to further improve the functions of the bond market, promote the high-quality development of asset-backed securities and REITs market, and enhance the quality and efficiency of bond market of Shanghai Stock Exchange (SSE) to serve the real economy, under the guidance of China Securities Regulatory Commission (CSRC), the SSE released and implemented Guideline No. 5 for the Confirmation of Shanghai Stock Exchange Asset-Backed Securities Listing Condition - Relevant Requirements for Insurance Asset Management Companies to Conduct Asset-backed Securities Business (for Trial Implementation) (hereinafter referred to as the Business Guideline) on March 3, 2023. The release of the Business Guideline expanded the scope of enterprise asset-backed security managers to insurance asset management companies, which was an important initiative for the SSE to promote the steady and sound development of asset-backed securities business and further expand the capability of asset-backed security products to serve the real economy.

The Business Guideline provided clear regulations on the application requirements, procedures and self-regulation for insurance asset management companies seeking to conduct asset-backed securities business. First, it specified the requirements for insurance asset management companies to apply for conducting asset-backed securities business and stipulated capabilities including the corporate governance, internal control management and asset management. Second, it specified the application procedures and requirements for the application process and on-site evaluations, etc. It also stipulated insurance asset management companies, as managers of asset-backed special plan, to submit application documents to the SSE when participating in asset-backed securities and REITs business. Third, it specified the regulatory arrangements and stipulated the supervision coordination mechanisms as well as business supervision and inspection.

Going forward, the SSE will adhere to the principles of systematic thinking, market-oriented concepts and pilot testing first under the unified leadership of the CSRC. It will also strive to maintain high standards and steady start to fully stimulate the enthusiasm of market entities, unblock channels for high-quality assets to enter the market, promote the construction of a multi-level REITs market, and further improve the quality and efficiency of asset-backed securities and REITs market serving the real economy.