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In order to effectively implement new higher-level laws such as the Rules for the Issuance and Listing Review of Corporate Bonds, SZSE issued the Business Guidelines for the Issuance and Listing Review of Corporate Bonds No. 1 – Major Concerns of Review (Revised in 2022) (hereinafter referred to as the Guidelines No. 1) and the Business Guidelines for the Issuance and Listing Review of Corporate Bonds No. 2 – Application Documents and Methodology Requirements (hereinafter referred to as the Guidelines No. 2) on April 29. With further refined review requirements and more clearly defined rules, those Guidelines will better guide market entities to fulfill their duties, protect investors’ legitimate rights and interests, and maintain the stable and healthy development of the bond market.
Those Guidelines mainly include the following contents. First, matching higher-level laws, and integrating rules to make them easier to understand and use for market participants. The Guidelines No. 1 has laid down major disclosure and verification requirements with a focus on issuers’ corporate governance, organizational structure, business conditions, financial position, special circumstances, etc. The Guidelines No. 2 has integrated relevant contents regarding methodology of application documents and general information disclosure in current rules including the Bond Business Guide No. 1 – Listing Pre-review Business of Public Issued Corporate Bonds and the Bond Business Guide No. 2 – Confirmation Business of Listing Conditions of Private Placement Corporate Bonds. And it has made adaptive adjustments based on the revisions to the Administrative Measures for the Issuance and Trading of Corporate Bonds and the Guidelines for Information Disclosure Contents and Formats by Companies Making Public Offering of Securities No. 24 – Application Documents for Public Issuance of Corporate Bonds (Revised in 2021) as well as the Administrative Measures for Information Disclosure on Corporate Credit Bonds, to establish a scientific, complete, easy-to-understand and user-friendly system of rules.
Second, refining information disclosure requirements in key fields and improving the transparency of the review work. The revised edition of Guidelines No. 1 has combined review and regulatory practices. Adhering to the principle of substance over form, it has refined the requirements on information disclosure by issuers under special circumstances. Such issuers include enterprise group issuers who are engaged in diversified operating activities and have a complex governance structure, issuers who have major risk events, and issuers of industries involving national policies adjustments. It has also emphasized that the raised funds from the issuance of corporate bonds shall be invested in business fields that are in line with national industry policies. On the whole, with information disclosure as its focus, the Guidelines No. 1 has further improved the standardability, transparency and predictability of review, thus improving the efficiency of regulatory service.
Third, focusing on the concerns of market entities, ensuring issuers and intermediaries fully fill their responsibilities, and protecting investors’ legitimate rights and interests. The revised edition of Guidelines No. 1 has made it clear that if there is a major concern or other major adverse information concerning the issuer’s business situation or financial position that may seriously affect its solvency, in principle, investor protection clauses such as credit enhancement, financial commitment, behavior restriction commitment, etc. shall be added. The Guidelines No. 2 has refined information disclosure requirements under special credit enhancement methods such as overseas credit enhancement and third-party acquisition. Meanwhile, it has stated clearly that issuers shall disclose relevant system arrangements for investor relations management and lead underwriters shall check such systems to fully protect investors’ legitimate rights and interests.
Next, SZSE will continue to earnestly implement the decisions and plans of the CPC Central Committee and the State Council and the arrangements and requirements of the CPC Committee of China Securities Regulatory Commission. We will adhere to the general principle of seeking progress while maintaining stability and apply the new development philosophy in the full and right way, and in all fields of endeavor. We will keep optimizing policies, regulations and mechanisms and put forth effort to build registration-based system with basic business rules at its core, business guidelines as its mainstay and handling guides as its supplement. Meanwhile, we will actively promote innovation in fixed-income products, direct funds to flow into key fields, major industries and weak areas, and continue to launch series products especially serving technological innovation and small and medium-sized enterprises in order to promote the high-quality development of the exchange-traded bond market and enhance the efficiency and quality of the capital market in serving national strategies and the real economy.
