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On December 7, SZSE released the revised Rules Governing Corporate Bond Listing and Rules Governing Private Placement Corporate Bond Transfer by Listing under the unified deployment of CSRC. Compliant with the new Measures on Administration of Securities Exchanges, such revision is a major means for SZSE to enhance the capability of capital market to serve the real economy. It can boost the sound development of the bond market by further normalizing and improving corporate bond listing and transfer by listing, increasing the quality of information disclosure in the corporate bond market, and protecting the legal interests of bond investors.
The revision took into consideration the advice from all sectors of society and mainly includes the following amendments:
First, enhancing the regulatory function of stock exchanges at the front line in strict compliance with relevant requirements of the Measures on Administration of Securities Exchanges, expanding the self-discipline scope to cover securities institutions, investors and their related persons; and improving the self-discipline system by introducing more regulatory means and measures such as on-site inspection and levying default penalties.
Second, earnestly implementing the principle of inclusion upon declaration to tighten issuance access control. A new chapter is added to specify the requirements on pre-listing audit of corporate bonds and eligibility review of private placement corporate bond transfer, which lays a solid foundation for self-discipline regulation on the access end and enhanced risk control at the source.
Third, improving information disclosure regulation by setting higher requirements of subjective, responsibility and compliance awareness, making it clear that the directors and senior executives of the issuer shall bear the duty of disclosure, emphasizing the duty of periodic report disclosure of private placement corporate bonds, specifying the time of periodic reports and removing the terms of delayed periodic report disclosure. Meanwhile, the circumstances for provisional reports are further complemented based on regulatory practice.
Fourth, optimizing investor protection mechanism by further stressing the credit risk management duty of issuers, trustees and related parties, particularly the trustee' duty to monitor, control and report risks and the related parties' obligation to cooperate with the trustees who are performing their duties. A new provision is added that SZSE may require issuers to employ accountants to carry out special audits on funds raised from time to time in line with the fund raising regulatory requirements. At the same time, bond holders meeting provisions are amended based on market needs to improve meeting efficiency.
