In order to implement the decisions and deployments of the CPC Central Committee and the State Council regarding institutional reform and to ensure a prudent and orderly transfer of responsibilities for reviewing corporate bond issuance, SZSE has recently formulated the Rules on Underwriting of Corporate Bond Issuance of SZSE (exposure draft) (hereinafter referred to as the “Underwriting Rules”) and revised the Rules on Review of Corporate Bond Issuance and Listing of SZSE (hereinafter referred to as the “Review Rules”), Rules on Listing of Corporate Bonds of SZSE (hereinafter referred to as the “Listing Rules”), Rules on Listing of Private Placement Corporate Bonds on SZSE (hereinafter referred to as the “Private Placement Listing Rules”) and Measures for Investor Suitability Management in the SZSE Bond Market (hereinafter referred to as the “Suitability Measures”). These documents are formulated under the overall guidance of the CSRC and are now open for public consultation before September 30, 2023.

The comprehensive and systematic revision and formulation establish the self-regulatory rules for the issuance and listing review, issuance underwriting and duration management of corporate bonds (including enterprise bonds) by keeping to the following ideas: Firstly, we adhere to an institution-based and rule-based approach to ensure the effective integration of self-regulatory rules of the exchange and build a unified regulatory system for corporate bond supervision. Secondly, we take into account the practices in bond market regulation and comply with the requirements for deepening the bond registration system reform , addressing institutional shortcomings and further strengthening the whole-process supervision covering pre-issuance, in-issuance and post-listing stages.

The Bond Review Rules primarily aims to unify the arrangements for the issuance and listing review of corporate (enterprise) bonds, improve the quality and efficiency of the review process, and promote coordinated development. The main revisions include: Firstly, the scope of application for including the enterprise bonds in the rules is clarified. The overall requirements on application methods, issuance conditions, review content and review procedures are aligned with the those for corporate bonds. Secondly, information disclosure requirements are further strengthened, with a focus on debt repayment ability, to enhance the relevancy of content disclosed in application documents. Thirdly, the registration process for issuance review is improved, specifying the procedures for resuming suspended or halted issuance. Additionally, according to the latest higher-level rules, appropriate adjustments to the acceptance stage and circumstances for suspending the review are made.

The Bond Issuance Underwriting Rules provides general provisions on the standardized performance, issuance underwriting procedures and self-regulatory requirements for underwriting institutions based on the characteristics and patterns of bond issuance. The main content includes the following three aspects: Firstly, it makes clear guidelines for the performance management of underwriting institutions, including business separation, internal control systems, collective decision-making and record-keeping of working drafts. Secondly, it provides further clarification of the time limits, procedures and information disclosure requirements for issuance filing, promoting a more standardized, transparent and predictable issuance filing process. Thirdly, it sets forth comprehensive regulation of bond bookkeeping and documentation issuance, specifies the use of the SZSE bookkeeping system for bookkeeping and documentation purposes and makes standard requirements for bookkeeping agents, bookkeeping timing, bookkeeping participation modes and internal supervision.

The Bond Listing Rules makes revisions to the requirements related to the bond duration management. The main adjustments include the following: Firstly, it simplifies the application materials for the listing of enterprise bonds. Secondly, it places emphasis on the construction and operation of projects financed with raised funds during the bond duration, adding temporary information disclosure requirements for significant changes in such   projects. Thirdly, it improves the arrangements for deferring disclosure and exemption from disclosure. Fourthly, it optimizes self-regulatory measures. In addition, the Private Placement Listing Rules mainly takes reference from the Bond Listing Rules, making synchronized adjustments to the provisions related to information disclosure and self-regulatory measures. Furthermore, the main revision to the Suitability Measures is clarifying the consistency between the suitability arrangements for enterprise bond investors and those for corporate bonds.

Next, SZSE will fully listen to the opinions of various market participants, study and incorporate reasonable suggestions and publish the implementation as soon as possible after completing the relevant procedures. Besides, we will make efforts to strengthen the institutional foundation and expedite the revision of guidelines for supporting businesses related to corporate bonds (including enterprise bonds). By synergizing the advantages of corporate (enterprise) bonds, we will to better support major project construction and enhance the ability of the bond market to serve national strategies and promote high-quality economic development.