Recently, with the approval of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) promulgated the newly revised "Rules of Shanghai Stock Exchange for Listing of Corporate Bonds" and "Rules of Shanghai Stock Exchange for Listing and Transferring of Non-publicly Issued Corporate Bonds" (collectively the "Listing and Trading Rules" for short).
Since 2015, the corporate bonds have seen the market develop steadily and the market structure improved continuously. With the market size gradually expanded, it has been increasingly necessary to further consolidate the basic institutional arrangements and improve the Listing and Trading Rules. To this end, the SSE initiated the revision of the Listing and Trading Rules in the second half of last year, and solicited opinions from the public in May this year. In the process of the revision, nearly 50 specific feedback opinions from relevant institutions and investors were received. The SSE has studied all the opinions one by one, and repeatedly discussed and reviewed the drafts, with all the reasonable and feasible comments absorbed and adopted. In addition to the adjustments to the style and structure of the rules, the revision focuses on the following aspects:
First of all, the front-line regulation has been strengthened and the regulatory efficiency has been improved effectively. To implement the latest requirements of the "Measures for the Administration of Stock Exchanges" for the exchanges in performing their duties, the Listing and Trading Rules expands the targets of self-regulation to the issuer and its controlling shareholders, actual controllers, directors, supervisors, and senior executives or personnel performing the same duties, as well as the specialized institutions and their personnel providing related services, and adds the regulatory means such as on-site inspection and the measures such as collecting punitive liquidated damages, so as to urge all market participants to perform their duties and further enhance the effectiveness of the regulation.
Secondly, the pre-examination procedures for bonds are standardized, and the "inclusion into regulation upon application" is stressed. A special chapter has been set to emphasize the regulatory requirements for the pre-examination of listing and the process of recognizing the listing conditions, further clarifying the issues such as the authority for pre-examination of bonds, the requirements for the application documents, the self-regulatory authority and reporting the post-term matters, so as to implement the pre-examination requirement for "inclusion into regulation upon application".
Thirdly, the arrangements for information disclosure and duration management have been improved and the protection of investors' rights and interests has been strengthened. To address the new challenges and situations in preventing and controlling the credit risk for bonds, the Listing and Trading Rules focuses on improving the institutional arrangements for duration by further enriching and intensifying the requirements for information disclosure, consolidating the obligations of the obligors for information disclosure, and confirming the requirements for the qualification of those in charge of the information disclosure affairs for the issuers; the Listing and Trading Rules details the responsibilities of the trustees, such as due diligence, risk management, complementary disclosure and risk warning, and the arrangements for the system of the holders' meeting have been optimized, so as to further enhance the risk prevention and control and the protection of the holders' rights and interests.
Fourthly, the trading suspension and resumption for the bonds has been standardized in a bid to ensure the stable operation of the bond market. In recent years, the market has been concerned about the problems such as the loss of liquidity caused by some bonds that had the trading suspended because of abnormal fluctuations or according to the rules. The revision has further improved the conditions for the application of trading suspension and resumption for bonds, so as to ensure the continuity in bond trading, and has refined the information disclosure, risk screening and other requirements during the trading suspension period.
Fifthly, the exchange system of self-discipline rules for bonds has been improved to achieve effective linkage and coordination. Absorbing the relevant rules and requirements newly issued in recent years, the Listing and Trading Rules confirms the regulatory requirements for specific bond products such as exchangeable bonds and renewable bonds, further enhancing the mechanism arrangements for trading and transferring of bonds.
The listing and trading rules for the bonds are the basic business rules of the SSE for the bond market. The revision and issuance of the Listing and Trading Rules will help further consolidate the SSE's system of rules for self-discipline management, regulate the market behaviors of issuers, intermediaries and other market participants such as listing and issuance, information disclosure, trading and transferring, and credit risk management, and lay a more solid institutional foundation for building a high-quality exchange-traded bond market. The SSE will effectively carry out the self-discipline management of the bond market as always, continuously improve the ability to organize the market and serve the real economy, earnestly safeguard the legitimate rights and interests of the bond investors, and promote and guarantee the stable, orderly and healthy development of the exchange-traded bond market.