In order to implement the decision and deployment of the CPC Central Committee and the State Council on institutional reform, earnestly implement the relevant requirements of CSRC’s Guiding Opinions on Deepening the Reform of the Bond Registration System and clarify the relevant duty division and work connection arrangements regarding the issue of enterprise bonds, SZSE has released five basic business rules including the Rules for Reviewing and Approving the Issuance and Listing of Corporate Bonds of Shenzhen Stock Exchange (Revised in 2023), 12 business guidelines and 5 guides such as Guidelines No. 1 for Reviewing and Approving the Issuance and Listing of Corporate Bonds of Shenzhen Stock Exchange (Revised in 2023), and the Notice on the Arrangement of the Enterprise Bonds Connection Work. These documents serve to make clear the requirements and arrangements with respect to the issuance acceptance and review, issuance and listing, supervision in their duration, and investor suitability management of enterprise bonds, further building a self-disciplinary regulatory system for the bond market. The system is designed to be open, transparent, standardized, orderly, clean, and efficient. The aforesaid self-disciplinary regulatory rules for bond business entered into effect from the date of making public. SZSE started accepting applications for enterprise bonds issuance and conducted the review process from 9:00 am on October 23. Currently, all preparations, including the technological system upgrades and the transition of ongoing projects, have been completed.

Enhancing the self-regulatory rule system to promote the coordinated development of corporate bonds and enterprise bonds

Previously, SZSE has sought public feedback on 5 fundamental business rules. The relevant market participants generally agree with the basic ideas and key content of the rules while providing a total of 37 comments and suggestions on certain aspects. After careful study and discussion, 13 reasonable suggestions have been incorporated to improve the rules accordingly. Explanations regarding the remaining suggestions that were not adopted will be provided in subsequent market training sessions.

These revised self-regulatory rules for bond business are formulated by SZSE based on the principles of institutionalization, standardization and transparency. Following the approach to promote the coordinated development of corporate bonds and enterprise bonds, we have made a systematic review and standardization of the entire business chain. The main aspects include the following. 

Firstly, strengthening regulatory coordination. The overall management of enterprise bonds is included in the scope of the self-regulatory rules for corporate bonds, encompassing the issuance acceptance and review, issuance and listing, ongoing supervision arrangements, investor suitability management of enterprise bonds, which are consistent with those for corporate bonds. 

Secondly, deepening functionality. To effectively absorb the management experience of enterprise bonds, the relevant requirements for the use of raised funds for fixed asset investment projects will be improved. Additionally, the scope of special varieties will be expanded to better leverage the functions of the bond market in serving national development strategies and industrial policies. 

Thirdly, enhancing service quality and efficiency. The rules clarify the time-frame for accepting revisions, submit registration documents, extend the deadlines for feedback and delayed replies, adjust the suspension conditions in the review process, thus strengthening market expectations. 

Fourthly, standardizing issuance and underwriting practices. Requirements are specified for the issuance registration process, bookkeeping and filing timelines, the use of bookkeeping systems, as well as the performance standards for underwriting institutions to enhance transparency in the underwriting process. Fifthly, improving ongoing supervision requirements. Information disclosure management and credit risk management systems are optimized, while the disclosure and verification requirements for the operational benefits of ongoing investment projects are clearly defined.

Efforts on making thorough preparations to ensure the smooth implementation of enterprise bonds underwriting business

SZSE attaches great importance to the transfer of responsibilities for the review of enterprise bonds issuance, recognizing that it is an important measure to implement the deployment of the 20th CPC National Congress of improving the functions of the capital market and increasing the proportion of direct financing. Under the leadership of CSRC and with the full cooperation of relevant units, SZSE has arranged dedicated personnel and positions to solidly and orderly advance the preparatory work for the acceptance review, issuance and listing, and continuous supervision of enterprise bonds. These efforts were made to accelerate the development and transformation of technical systems and ensure the smooth implementation of the transfer of responsibilities for enterprise bonds. In terms of institutional processes, 22 business rules and guidelines have been formulated and revised and a comprehensive review of business processes has been conducted to ensure effective connections between institutions and processes. In terms of technical preparations, the technical transformation of relevant business systems has been completed. The bookkeeping and filing system was officially launched on October 16 and consultations have been made with relevant settlement units on matters related to registration and custody arrangements for enterprise bonds. As for market organization, operational training for the bookkeeping and filing system was conducted on October 19 and special training and service coordination for projects under review were provided.

In the preparatory work, SZSE consciously accepted the supervision and inspection of CSRC on stock exchanges’ relevant work regarding enterprise bonds, as well as the supervision of the discipline inspection and supervision group stationed by CSRC. We closely cooperated with the disciplinary inspection and supervision group stationed by the CSRC to ensure effective supervision at SZSE. We have integrated the construction of a clean exchange and business operations, promotes in depth the campaign of “Three Transparents and Two Improvements”, comprehensively strengthened the construction of a risk prevention and control mechanism for the integrity of enterprise bonds, continuously improved the supervision and restraint mechanism for the exercise of the power to review the issuance of enterprise bonds, and included all supervision requirements into the various stages of the business process. We have continued to strengthen a strict atmosphere, focused on key personnel, key positions and critical links, and promoted the principles of no corruption, zero tolerance for corruption and no desire for corruption as a whole, ensuring a smooth and orderly undertaking of enterprise bonds business.

Strengthening the construction of the bond market to enhance the ability of serving high-quality economic development

Next, according to the unified deployment of CSRC, SZSE will undertake the responsibility of reviewing enterprise bonds issuance in a stable and prudent manner to promote the effective functioning of enterprise bonds. Firstly, we will adhere to openness and transparency and enhance institutional mechanisms. Continuously optimizing the relevant systems, mechanisms, standards and processes for enterprise bonds, we aim to improve the norms, transparency and predictability of the review process and solidly promote the integration of review effectiveness improvement and integrity risk prevention and control, ensuring the “stable and proper assumption” of responsibilities in enterprise bond issuance. Secondly, we prioritize market-oriented approaches to enhance service efficiency. Focusing on market concerns, SZSE promptly organizes self-discipline rule training, strengthens market cultivation services, investor education and other related work to enhance the satisfaction and sense of achievement for all market participants. Thirdly, we uphold both adherence and innovation to enhance market functionality. With the overall goal of “creating a standardized, transparent, open, dynamic and resilient capital market”, SZSE insists on promoting development through reform. Taking the responsibility of reviewing enterprise bonds issuance as an opportunity, SZSE promotes the coordinated development of corporate (enterprise) bonds, ABS and infrastructure REITs to increase the proportion of direct financing and further enhance the exchange’s ability to serve national strategic initiatives and high-quality economic development.