SSE Improves Supporting Rules of Registration-based Issuance System for Corporate Bonds

22 Apr 2022

With the approval of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) issued today 4 sets of rules on bond business, namely, the SSE Rules of Issuance and Listing Review for Corporate Bonds, the SSE Rules for Listing of Corporate Bonds, the SSE Rules for Listing of Non-publicly Offered Corporate Bonds, and the SSE Measures for Investor Suitability Management on the Bond Market. Upon the issuance of the rules, the SSE’s bond market has basically formed a complete and independent system of rules covering all business lines such as issuance and listing review, underwriting, listing, trading operation, and investor protection. In addition, the significant reduction in the number of the business rules and the concise and user-friendly structure of the rules facilitates the market participants’ reference and use on demand.

Since the reform of corporate bond issuance in 2015, under the guidance of the CSRC, the SSE has adhered to the market orientation and the rule of law in the improvement of the basic system for the corporate bond market, thus steadily pushing higher its capacity for serving the real economy. In 2020, the Securities Law established the basic principles for the registration-based issuance system for corporate bonds, and the Administrative Measures for the Issuance and Trading of Corporate Bonds issued by the CSRC further clarified the institutional arrangements. In line with the effective coordination of the systems at the self-regulatory level and the implementation of the specific requirements for the reform of the registration-based issuance system and “streamlining procedures, delegating power, and improving services”, the SSE has comprehensively formulated and improved the supporting business rules of the registration-based issuance system for corporate bonds.

Based on the public opinions solicited earlier, the SSE has rationalized the rules in the following three aspects. First, in terms of the standards and norms for the implementation of the system, the concise and user-friendly characteristics have been further highlighted, with much more predictable and transparent review procedures, content and standards, specific circumstances of listing termination, and simplified listing requirements. All this helps to facilitate the participation in the market and strengthen checks on and oversight over the exercise of power. Second, in terms of market improvement, the rules focus on giving full play to the market’s endogenous mechanism and role of self-discipline, intensifying the requirements for information disclosure, tightening the intermediaries’ responsibility for checking, and improving the endogenous mechanisms for protection of investor rights such as the holders’ meetings and the entrusted management system. All this aims to raise various market participants’ awareness of responsibility and further strengthen the market obligations. Third, in terms of market regulation, the rules enhance the requirements for investor suitability according to the current market developments, step up the protection of ordinary investors, further clarify the self-regulatory requirements that each market player should comply with, specify the violations and the corresponding accountability, and reflect the “zero tolerance” for all kinds of violations.

Going forward, under the unified leadership of the CSRC, the SSE will take the reform of the registration-based issuance system as an opportunity, continue to further stimulate the vitality of market participants by optimizing services, intensifying supervision and other means. In addition, it will continuously advance the high-quality development of the bond market. To achieve the end, it will urge relevant entities to fulfill their responsibilities, give full play to the role of the SSE bond market in increasing the proportion of direct financing, and better implement the relevant requirements for serving the development of the real economy and preventing and controlling financial risks.
 

Attachments:

Notice of Issuing the SSE Rules of Issuance and Listing Review for Corporate Bonds

Notice of Issuing the SSE Rules for Listing of Corporate Bonds (Revised in 2022)

Notice of Issuing the SSE Rules for Listing of Non-publicly Offered Corporate Bonds

Notice of Issuing the SSE Measures for Investor Suitability Management on the Bond Market (Revised in 2022)