The Shanghai Stock Exchange (SSE) issued the "Notice on Relevant Matters over Listing and Trading of China Railway Construction Bond" (the "Notice" for short), which has specified the issuing, listing and circulation, information disclosure and continuous management for China railway construction bond (the railway bond for short). The move aimed to implement the strategic cooperation agreement between China Railway Corporation and the SSE, well prepare for the cross-market issuing and listing of the railway bond, expand its investment subjects, optimize the exchange-traded bond market's structure, improve the liquidity of the secondary market of the railway bond, and enhance the capacity of the exchange-traded bond market in serving the real economy.
The "Notice" first makes clear the listing and trading arrangement. It stipulates that the railway bond is subject to such business rules as the "SSE Trading Rules" and the "SSE Detailed Rules for Implementation of Bond Trading". It adopts bidding, quoting, enquiry and contractual trading, opens to public investors and qualified investors, and can be used for collateralized repo after listing and to which the repo discount coefficient of government-backed debts is applicable. Secondly, the "Notice" stipulates the information disclosure in duration and relevant specific requirements. It requires an issuer to disclose such issues as the annual financial report, the matters to be disclosed as stipulated in the prospectus, and the key matters that might affect debt repayment ability, in addition to specifying the place and time limit for information disclosure. Thirdly, the "Notice" proposes the requirement of continuous management, making clear the requirement on announcing the issuer's clauses involving rights in duration. Fourthly, it stipulates issues on registration, deposit, settlement, and interest and principal payment of the railway bond. Fifthly, it confirms that no service fee will be charged for the issuing and listing of the railway bond temporarily.
Next, the SSE will further encourage qualified subjects or assets affiliated to China Railway Corporation to conduct bond financing and asset securitization on the SSE and boost investors to widely participate in the financing of China Railway Corporation, thus adapting to the financing need of the rapidly-developing China railway cause towards the capital market.