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On August 30, under the guidance of the CSRC, Shenzhen Stock Exchange (“SZSE”), National Equities Exchange and Quotations Co., Ltd. (“NEEQ”) and China Securities Depository and Clearing Corporation Limited (“CSDC”) formulated and issued the Implementation Measures for Convertible Corporate Bonds Issued by Unlisted Companies via Private Placement (the “Measures” for short), to further broaden the scope of entities issuing convertible corporate bonds via private placement. The Measures is an important move taken by SZSE to provide easy access to affordable financing for private enterprises, in accordance with the requirements of the Opinions on Strengthening Financial Services to Private Enterprises of the General Office of the CPC Central Committee and the General Office of the State Council. The Measures also broadens the financing channels and reduces financing costs for enterprises and provides investors with more exit channels, thus enhancing market appeal.
Previously, SZSE, NEEQ, and CSDC jointly promulgated the Implementation Rules on Convertible Corporate Bonds Issued by Innovative Startups via Private Placement (Provisional) (the “Rules” for short), which for the first time clarifies the specific requirements for innovative startups issuing convertible corporate bonds via private placement, enhances the appeal of innovative startups’ bonds and steps up innovation of mechanisms whereby innovative startups formulate their social capital.
Based on the successful experience of innovative startups issuing convertible corporate bonds via private placement, SZSE worked with NEEQ and CSDC to amend the Rules and issue the Measures, which expanded the issuers from innovative startups to unlisted companies, added requirements for investor suitability management, further improved regulatory rules on information disclosure, and stipulated that the trustee should disclose relevant information on shares transferred during the reporting period in the annual trusteeship management report. In addition, considering the particularity of convertible bonds issued by innovative startups via private placement, the Measures also specifies that such bonds shall be issued with reference to the Guidance of the CSRC on Piloting Innovative Startup Bonds at the same time.
For a long time, SZSE has focused on giving play to the functions of the bond market, improving the financing environment for private enterprises and satisfying their development needs. Going forward, it will continue to follow the unified arrangements of the CSRC and bear in mind the fact that a large number of private enterprises are based in Shenzhen. It will constantly summarize the experience from and strengths for serving private enterprises, improve bond market mechanisms and institutions, promote product innovation in the bond market, enrich financing methods, reduce financing costs, and help private enterprises achieve better development by making use of the diversified products offered by the capital market.
