In order to implement the CPC Central Committee and the State Council's decisions and arrangements on institutional reform, following the unified arrangement of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) officially released 20 business rules for corporate bonds (including enterprise bonds) today. These rules cover the main institutional arrangements for issuance review, underwriting, self-regulatory supervision during the bond's lifespan, and investor suitability management. Currently, the SSE is prepared in terms of rules, business, technology, and market for the smooth implementation of the transition.

Unifying business rules for corporate bonds and enterprise bonds under the principles of standardization, transparency, and priority

The 20 business rules released this time include 5 basic business rules, 10 guidelines, and 5 guides. Earlier, the SSE publicly sought opinions on 5 basic business rules, gaining general recognition as well as valuable suggestions from the market. During the consultation period, a total of 26 market opinions were received. After careful study, most of the opinions were adopted, while the unadopted ones will be explained in subsequent policy promotion and market training.

The revision of rules this time adheres to the principles of standardization, transparency, and market convenience. In the meantime, the specific characteristics of corporate bonds and enterprise bonds were considered, integrating the excellent practices of enterprise bonds into the corporate bond rule system. In terms of issuance review, the system arrangement for the capital raised from enterprise bond to serve national major strategies and major project construction was absorbed, the function positioning of enterprise bonds was clarified, and the review standards, procedures, and targeted review arrangements for corporate bonds (including enterprise bonds) were unified as a whole. Meanwhile, the supervision of the use of raised funds, especially for investment projects, was strengthened, and the information disclosure requirements focusing on debt repayment capability were further enhanced. In terms of issuance underwriting, several significant steps have been taken to enhance transparency and standardization. These measures encompass the unification of the issuance underwriting, record filing, and bookkeeping arrangements for corporate bonds and enterprise bonds, the clarification of duty performance specifications for underwriting institutions, and the reinforcement of intermediary institutions' verification responsibility. These collective efforts aim to promote the issuance and underwriting of bonds, facilitating a more market-oriented issuance. In terms of bond lifespan supervision, the listing standards and procedures, information disclosure requirements, and credit risk management of corporate bonds and enterprise bonds were unified. At the same time, the disclosure and verification of investment projects were tailored to suit the characteristics of enterprise bonds. Moreover, the ex ante procedures for postponing and exempting disclosure were abolished, and adjustments were made to credit risk monitoring and investigation and response procedures, while self-regulatory supervision arrangements were streamlined. In terms of investor suitability management, it was clarified that the investor suitability arrangements for enterprise bonds are consistent with corporate bonds.

Making full effort to ensure smooth transition arrangements for enterprise bonds

Under the guidance of the CSRC and with the support of relevant institutions, the SSE is making every effort to make deployment in advance in institutional improvement, system transformation, business optimization, and market organization, and is doing a good job in the implementation of each link and the transition arrangements. In terms of institutional arrangements, in addition to the release of 20 business rules, the Notice on the Arrangements for the Transition of Enterprise Bonds was issued, clarifying the specific transition arrangements for enterprise bond acceptance review, issuance listing, bond life span supervision, and investor suitability management. In terms of technical preparation, the technical preparations for all systems have been completed, involving 7 technical system transformations, covering the five business links of review, filing, issuance, listing, and continuous supervision, and reaching an agreement with related settlement institutions on business transition matters. In terms of business process, the full business process has been sorted out, and joint testing of the business process involved in the enterprise bond transition has been carried out to ensure a seamless transaction. Also, tracking mechanisms have been put in place for tracking before and after the launch and for "first project tracking" of each business, and emergency plans have been formulated to address any unexpected issues. In terms of market organization, a strong commitment to providing market services is maintained. According to the unified arrangements of the bond department, solid work has been done for the handover of projects under review during the transition period. Market organization and guidance are consistent throughout the process, with a focus on providing timely business training and technical support.

During the preparations, the SSE has concurrently strengthened the construction of a comprehensive integrity risk prevention mechanism for bond businesses, effectively enhancing political standing and establishing bottom-line thinking. It willingly accepts supervision from all parties and persists in coordinating the development of integrity and business operations, embedding integrity requirements into various business systems, mechanisms, processes, and management of enterprise bonds. It places significant emphasis on comprehensive, all-around integrity risk prevention, focusing on key positions and critical links, continuously intensifying a strict atmosphere, and coordinating efforts to prevent corruption. This ensures a secure and organized transfer of enterprise bond responsibilities.

Pooling strength in a steady yet progressive manner to promote the effective performance of enterprise bonds

The transfer of responsibilities of enterprise bonds is a major decision and arrangement by the CPC Central Committee and the State Council. Following the work arrangement of the CSRC, the SSE has adhered to the general principle of advancing while maintaining operational stability. Through proactive coordination with all parties and a deep commitment to fully respecting and harnessing the capabilities of market entities, the SSE ensures the smooth implementation of the transition of enterprise bonds. After the official transition of enterprise bonds, the SSE will promote the coordinated development of corporate bonds and enterprise bonds under the guidance of the CSRC, and continue to facilitate the effective performance of enterprise bonds. First, consolidating the institutional foundation. In line with the idea of unifying corporate bonds and enterprise bonds, the SSE will continue to strengthen disclosure requirements focusing on debt repayment capacity, optimize the review and registration process, and construct a comprehensive, open, transparent, standardized, orderly, and efficient institutional rule system for corporate bonds (including enterprise bonds). Second, facilitating functional performance. The SSE will highlight the characteristics and advantages of enterprise bonds, maintaining the institutional arrangement of "funds following the project". This will better support national major strategies and major project construction functions, contributing to investment promotion and economic stability. Third, promoting high-quality development of the bond market. The SSE will continuously optimize the structure of the bond market, further strengthen self-regulatory supervision, consolidate the main responsibility of bond issuers, urge intermediary institutions to fulfill their duties, support market participants to continue to use bond financing tools in accordance with laws and regulations, and serve national strategies and the real economy.