SSE Solicits Public Opinions on Several Business Rules to Improve Supporting System for Corporate Bond Registration System
Today, the Shanghai Stock Exchange (SSE) solicited public opinions on the recently drafted and revised SSE Rules for Issuance and Listing Review of Corporate Bonds, SSE Listing Rules of Corporate Bonds, SSE Rules for Listed Transfer of Non-publicly Issued Corporate Bonds, and SSE Management Measures for Investor Suitability in Bond Market.
Since the reform of corporate bonds issuance in 2015, the SSE, following the guidance of the China Securities Regulatory Commission (CSRC) and adhering to the direction of market principles and the rule of law, has promoted the infrastructure construction of corporate bond market. Its issuance of RMB3.6 trillion corporate bonds in the market in 2020 has significantly improved the ability to serve the real economy. This year, taking the implementation of the new Securities Law as an opportunity, the CSRC revised the Administration Measures for Corporate Bonds Issuance and Trading to focus on regulating the relevant issues of the corporate bonds registration system. The registration system of corporate bonds is a major reform to improve the function of capital market to serve the real economy. It is expected to enable market entities to play a key role in resource allocation through the implementation of the requirements of "simplifying administrative procedures by delegating powers to lower levels, innovating regulation and improving services". For the system of self-regulation, the SSE drafted and revised the relevant business rules of corporate bonds and established and adjusted relevant mechanisms and arrangements. In addition, it has implemented the specific requirements of the registration system and contributed to deepening the reform of the bond market.
In terms of the standards and norms of the implementation of the corporate bonds system, the exposure draft on relevant rules features concise and user-friendly self-regulatory rules. Firstly, the contents and standards of review, open and transparent, focus on whether the issuers meet the listing conditions stipulated by laws and regulations and whether the information disclosure is compliant and sufficient. Secondly, the review procedures are standardized. There are clear procedures and time limit requirements for each step, from accepting the application for issuance and listing to issuing review opinions, and the transition to the registration at the CSRC is clarified. Thirdly, the listing efficiency is further improved by deleting the listing application documents such as the listing notice and the resolution of the authority of the issuer to simplify the relevant application requirements. Fourthly, the situation of termination of listing is clearer. In addition to the termination of listing after all bonds have been paid for or converted into stocks, four special situations of termination of listing are specified to establish the closed-loop management of bond listing. Fifthly, the restriction of power should be strengthened. The application documents for issuance and listing, and the corresponding review progress and results should be timely publicized to the market through the website, making the review operation subject to public supervision.
In corporate bonds market development, the draft focuses on the internal market mechanism and giving full play to self-restraints in the process of formulation and revision. Firstly, the draft strengthens the requirements for information disclosure. The issuers should truthfully, accurately and completely disclose information around solvency, and ensure that the information disclosure is concise, clear, easy to understand, sufficient, consistent, targeted and reasonable. The directors, supervisors and senior management of the issuer shall sign a written confirmation opinion on the information disclosure documents of the issuer. Should any objection arise, it shall be disclosed in a timely manner. Secondly, the draft will strengthen the judgment responsibility of intermediaries. Intermediaries should express clear opinions on whether the issuers meet the relevant listing conditions, and check the authenticity, accuracy and completeness of the information disclosure of the issuers within their respective responsibilities, and ensure the authenticity, accuracy and completeness of their professional opinions. Thirdly, the draft will strengthen the internal mechanism of investor protection, guide market participants to clarify through contracts, elaborate on all kinds of agreed matters, improve the bondholders' meeting and trustee management system, clarify the effectiveness of dispute resolution mechanism and supervise the performance of intermediary agencies, to further strengthen market restraints.
In addition, the draft also focuses on strengthening the daily supervision of corporate bonds market and maintaining market order. Firstly, it will improve the requirements of investor suitability, considering the issuer structure, trading mode and credit risk characteristics of the bond market. This time, the classification of investors and the investment scope of different investors have been adjusted, and the protection of the rights and interests of ordinary investors has been strengthened, and the special protection obligations of the securities institutions to ordinary investors are clarified. Secondly, the draft will strengthen self-regulation measures by further clarifying the self-regulation requirements that issuers, controlling shareholders, actual controllers, intermediaries and relevant personnel should abide by in the life cycle of corporate bonds. The SSE can regulate through onsite or offsite inspection and supervision. The SSE also elaborated on the violation of regulations, types of applicable regulatory measures and disciplinary punishment, reflecting “zero tolerance” on all kinds of violations.
The SSE will work effectively on the collection, evaluation and integration of relevant feedback, timely publish relevant business rules, and establish and improve the corporate bond rule system. Going forward, under the guidance of the CSRC and taking the opportunity of registration system reform, the SSE will, through improving service and strengthening supervision, continue to stimulate the vitality of market participants, guide relevant subjects to fulfill their due responsibilities, give full play to the role of the bond market as a hub, better serve real economic development, meet the requirements of financial risk prevention and control, and continue to promote the high-quality development of the bond market.
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