Beyond expectations! On the first day of the implementation of the new securities law, bond registration system came into effect!

category:Finance
 Beyond expectations! On the first day of the implementation of the new securities law, bond registration system came into effect!


On March 1, the national development and Reform Commission issued a document saying that from now on, the issuance of corporate bonds has changed from the approval system to the registration system, and the national development and Reform Commission is the legal registration organ of corporate bonds. After the new regulation, the national development and Reform Commission further delegated the authority of acceptance and audit, which will greatly simplify the process of acceptance and audit of corporate bonds, and cancel the provincial development and Reform Commissions reporting link in corporate bond declaration. Industry insiders expect that the stock scale is expected to expand, but the provincial development and Reform Commission strengthened the audit of fund-raising investment projects, and the bond market risk is still controllable.

On the same day, the CSRC, the Shanghai Stock Exchange and the Shenzhen stock exchange all issued documents indicating that from now on, the public issuance of corporate bonds shall be accepted and reviewed by the exchange, and reported to the CSRC to perform the issuance registration procedure, and the examination shall be conducted electronically. The conditions for the public issuance of corporate bonds and the conditions for listing and trading have been adjusted. The conditions such as minimum net assets of the company, accumulated bond balance not exceeding 40% of the net assets of the company and the conditions for listing and trading of corporate bonds with a term of more than one year have also been deleted.

According to the head securities firms person in charge of fixed income, after the registration system is implemented for the issuance of corporate bonds and corporate bonds, it can be predicted that the approval process for the issuance amount of corporate bonds and corporate bonds will be simplified, the approval period will be shortened, the regulatory attitude towards the issuance of bonds will shift from biased restriction to biased support, and the market issuance scale is expected to increase. At the end of the day, regulators want to help the entity clear its liquidity.

According to the person in charge of bond issuance of medium-sized securities companies, the national development and Reform Commission and the Securities Regulatory Commission jointly issued new regulations on the registration system of corporate bonds and corporate bonds on the same day, which reflected the spirit of the registration system of securities varieties under the new securities law system on the one hand, and the convergence with the registration system of debt financing tools in the inter-bank market on the other hand, which reflected the gradual unification trend of the bond market.

After the implementation of the registration system, the supervision will further implement the issuance and listing audit system with information disclosure as the core. Declaration will be included in the supervision, and the responsibilities of issuers and securities service agencies will be strictly compacted.

The registration system is fully implemented for the issuance of corporate bonds, and the national development and Reform Commission has delegated the authority to accept and verify the issuance of corporate bonds

The circular on the implementation of the registration system for the issuance of enterprise bonds issued by the national development and Reform Commission indicates that the issuance of enterprise bonds should be changed from the approval system to the comprehensive implementation of the registration system. The national development and Reform Commission is the legal registration authority for enterprise bonds. The issuance of enterprise bonds should be registered with the national development and Reform Commission in accordance with the law, and the conditions for the issuance of enterprise bonds should be clarified, and the requirements for information disclosure and intermediaries should be strengthened Institutional responsibility.

There are middle-sized bond managers who have analyzed the specific impact of corporate bond issuance process before and after the new regulations on Chinese journalists of securities companies:

First of all, in terms of the acceptance and audit process, during the approval system period, the national development and Reform Commission is the acceptance institution, and the corporate bond issuer applies to the national development and Reform Commission, which entrusts the central government bond registration and settlement Co., Ltd. or the China Association of inter bank market dealers to conduct acceptance evaluation and technical evaluation. After accepting the evaluation and technical evaluation, the national development and Reform Commission is still required to conduct Department Affairs It will be reviewed by the joint review committee.

During the registration period, the acceptance and audit process will be greatly simplified, and the national development and Reform Commission will further delegate the acceptance and audit authority. The national development and Reform Commission shall supervise and guide the acceptance and examination of corporate bonds and the two designated institutions. The above principals predict that the efficiency of acceptance and audit will be greatly improved in the future, and the specific process and audit standards need to be further formulated and clarified by China government securities depository and Clearing Co., Ltd. and China Association of interbank market dealers.

Second, in terms of the declaration process, Article 4 of the notice of the national development and Reform Commission stipulates that, in accordance with the needs of the reform of the registration system, the provincial development and Reform Commissions reporting link in the declaration of corporate bonds should be cancelled. In the past, except for the local enterprises within the scope of the through train mechanism of corporate bonds, the transfer documents of the provincial development and Reform Commission were required.

This also means that after the new regulations, all corporate bond issuers no longer need the provincial development and Reform Commission to issue the transfer documents when applying for corporate bonds, but if the fixed asset investment projects are involved, the provincial development and reform department shall issue special opinions that conform to the national macro-control policies, fixed asset investment management regulations and industrial policies for the raised investment projects, and bear corresponding responsibilities. The document specifies the responsibilities of the provincial development and Reform Commission for the raised investment projects, and it is expected that the provincial development and Reform Commission will strengthen the audit of the raised investment projects in the future.

Generally speaking, the process of declaration, examination and acceptance of corporate bonds will be greatly simplified after the new regulations, and the issuance efficiency will be greatly improved.

Mingming, chief executive of CITIC Securities bond, told the securities firms Chinese reporter that in the notice of the national development and Reform Commission, the provincial development and Reform Commission put forward the requirements of issuing special opinions, doing a good job in supervision, taking responsibility, preventing and resolving risks, etc., which reflected the strict control on the default risk of corporate bonds.

Delete the listing conditions such as the term of corporate bonds is more than one year

On the same day, the CSRC issued the notice on matters related to the implementation of the registration system for public issuance of corporate bonds. From now on, the registration system is implemented for public issuance of corporate bonds. For the public issuance of corporate bonds, the stock exchange shall be responsible for the acceptance and examination, and report to the CSRC for the implementation of the issuance registration procedure. The Shanghai Stock Exchange and the Shenzhen Stock Exchange respectively issued relevant notices to market participants. The Shanghai Stock Exchange also answered reporters questions on topics of social concern, and more detailed some provisions on the implementation of the registration system for the issuance of corporate bonds.

Chinese journalists of securities companies sort out nine specific points and interview industry and researchers for analysis as follows:

1u3001 Electronic audit shall be carried out for the issuance of corporate bonds to improve the transparency of audit and clarify market expectations. The application, acceptance, inquiry, reply and other matters shall be handled through the bond project application system of the exchange, and the review process and time limit shall be temporarily implemented in accordance with the current relevant provisions of the companys bond listing pre review.

2u3001 Adjust the conditions for the public issuance of corporate bonds, add the conditions for having a sound and well functioning organization, delete the conditions such as minimum net assets of the company and the accumulated bond balance shall not exceed 40% of the net assets of the company; at the same time, the Notice of the State Administration clearly states that the issuers public issuance of corporate bonds shall not only meet the requirements of the securities law, but also meet the requirements of the securities law When it has a reasonable asset liability structure and normal cash flow.

Mingming said that on the margin, the threshold for bond issuance is low and the bond issuance volume is expected to increase. Follow up to observe the impact of the implementation of specific policies on the refinancing of issuers and the supply of bond market.

Before that, Mingming said, most of the corporate bonds publicly issued were medium - and long-term, with maturities longer than one year. At present, the total face value of general corporate bonds is 3.91 trillion yuan, accounting for 8.82% of the total face value. After this liberalization, the variety of corporate bonds is expected to be rich and the supply is expected to increase.

4u3001 There is no longer a distinction between large and small public offering bonds. All publicly issued corporate bonds to be listed on the Shenzhen Stock Exchange shall be accepted and reviewed by the Shenzhen Stock Exchange, and shall be submitted to the CSRC for implementation of the issuance registration procedures after passing the review. Non publicly issued corporate bonds shall still be implemented in accordance with the existing provisions.

According to the person in charge of bond issuance of a securities firm, for the public issuance of corporate bonds, the original corporate bonds of large public offering shall be reviewed by the CSRC, while the corporate bonds of small public offering shall be pre reviewed by the exchange and approved by the CSRC. Now we will cancel the division of large and small public offerings, which will be reviewed by the exchange and registered with the CSRC. The examination power of CSRC is delegated.

5u3001 The requirements for continuous information disclosure have been improved, the scope of information disclosure obligors has been expanded, and the disclosure contents of major events have been specifically defined. Consolidate the legal responsibilities of issuers and securities service institutions. Make clear the regulations on the presumption of fault and joint and several liability of the controlling shareholders and their actual controllers in fraudulent issuance, as well as the securities service institutions and their responsible personnel in respect of their duties to be fulfilled.

6u3001 The public issuance of corporate bonds shall meet the new conditions for issuance and listing. The content and format of application documents and prospectus shall still be implemented in accordance with the current provisions. The review process and time limit shall temporarily be implemented in accordance with the current provisions of the preliminary review of corporate bonds listing.

7u3001 The application projects for public issuance of corporate bonds accepted by the stock exchange before March 1, 2020 shall be implemented in accordance with the standards and procedures stipulated in the original securities law and the measures for the administration of corporate bond issuance and trading.

8u3001 From March 1, 2020, the exchange will no longer implement the system of suspension of listing; for bonds that have been suspended from listing, the issuer shall determine the trading mode and make timely announcement in accordance with Article 1 of the notice on Relevant Matters Concerning Adjustment of trading mode during bond listing (SSE [2019] No. 39).

9u3001 During the audit, we will focus on and judge whether the issuer meets the conditions for the public issuance of relevant corporate bonds and the listing conditions stipulated by the exchange, and urge the issuer to improve the content of information disclosure. If it passes the examination, the exchange shall submit the examination opinions and relevant application documents to the CSRC to perform the issuance registration procedure; if it fails the examination, it shall terminate the examination of issuance and listing and inform the issuer of the reasons.

Why did the registration system take the lead in the implementation of bond issuance market?

After the pilot of science and technology innovation board, the registration system was first implemented in the issuance market of corporate bonds and corporate bonds. More than expected, not so fast, said several industry figures. The new securities law was formally implemented on March 1. The core content is to implement the registration system in the capital market. Why does the registration system take the lead in the bond issuance market?

The head securities firms fixed income principal analyzed to securities firms Chinese reporter and thought:

Firstly, the bond market is a very important part of the direct financing market;

Second, compared with other products, the issue of debt is essentially a liability in financial management, which involves the issue of adjusting the cash flow before and after the adjustment. It is relatively simple and clear, and is more effective in alleviating the as pressing danger of shortage of capital flow in enterprises.

Third, under the current situation, the society is generally worried about whether the capital flow of the real economy will go wrong, but the cycle of refinancing through equity is relatively long, the operation of bond issuance is relatively simple, and it will not have a great impact on the corporate governance structure. Now is a good time to implement the bond issuance registration system.

According to the person in charge, after the registration system is implemented for the issuance of corporate bonds and corporate bonds, it can be predicted that the approval process of issuance limit will be simplified, and the approval period will be shortened. It is felt that the attitude of the supervision towards issuance will shift from the biased restriction to the biased support, and the scale of market issuance is expected to increase. At the end of the day, regulators want to help the entity clear its liquidity.

Mingming, chief analyst of CITIC Securities bonds, told reporters that the new regulations will have a positive impact on the operation of Chinas bond market, prevent and resolve financial risks, and at the same time better serve the real economy is an important task of the current supervision. The new regulations not only emphasize the market-oriented operation, but also emphasize that intermediaries should perform their duties conscientiously. Expanding capacity does not mean the risk of laissez faire, which is beneficial to Improve the financing environment of enterprises, prevent financial risks and promote the high-quality development of Chinas financial market. At the same time, in the period of the impact of the epidemic, the introduction of the new regulations will significantly ease the current situation of corporate financing difficulties, help promote the healthy development of the bond industry, and help the real economy financing.

It is worth mentioning that with the full implementation of the registration system for the public issuance of corporate bonds and corporate bonds, the requirements for information disclosure of issuers are further improved, and the responsibilities of intermediary agencies are also tightened.

Mingming believes that the registration system will be implemented for corporate bonds and corporate bonds, or the market-oriented disposal of bond default will be accelerated. After the change to the registration system, the responsibilities of intermediaries increased, and both the exchange and the national development and Reform Commission mentioned the requirements for intermediaries. The exchange will strengthen the supervision of issuers and securities service institutions, guide investors to establish the awareness of taking risks and responsibilities on their own; the document of the national development and Reform Commission mentions that intermediary institutions shall conduct full due diligence on bond issuers, assist in information disclosure, and be responsible for the professional reports and opinions issued. In addition, in the future, the development and Reform Commission will support the unified work of the CSRC, which is conducive to market-oriented supervision and disposal.

In response to the reporters questions, Shanghai Stock Exchange also elaborated on the supporting measures of self-discipline supervision after the registration of corporate bonds:

First, strengthen information disclosure, and further implement the issuance and listing audit system with information disclosure as the core. As the first person responsible for information disclosure, the SSE will pay attention to whether it meets the conditions of issuance and listing, focus on information disclosure audit as the core, and urge it to fully disclose the information necessary for investors to make value judgments and investment decisions.

Second, the declaration will be included in the supervision, and the responsibilities of issuers and securities service institutions will continue to be tightened. The honesty and trustworthiness of the issuer and the diligence of the securities service institutions are the important foundation and guarantee of the reform of the corporate bond registration system. Shanghai Stock Exchange will urge securities service institutions to fulfill their due diligence obligations and check and control responsibilities, and effectively play the role of gatekeeper. The SSE will take regulatory measures to deal with major violations of laws and regulations related to information disclosure, such as financial fraud, in accordance with laws and regulations, effectively maintain a standardized and orderly market environment, and protect the legitimate rights and interests of investors.

According to the Shanghai Stock Exchange, this marks a new historical stage in the development of the corporate bond market. Since 2015, the public issuance of corporate bonds has established the issuance supervision system which is pre examined by the stock exchange listing and adopted the simple approval procedure by the CSRC, formed a relatively mature investor suitability system, and improved the information disclosure system and investor protection system with solvency as the core. The corporate bond market has made great progress, and the market has operated steadily, and obtained the market Widely recognized. By the end of February 2020, Shanghai Stock Exchange has issued nearly 10 trillion yuan of corporate bonds, with an average annual issuance of more than 2 trillion yuan. The ability of corporate bond market to implement national strategy and serve the real economy has been significantly improved, and the reform of marketization and rule of law has achieved positive results. Generally speaking, the implementation of the registration system of corporate bonds has a relatively mature practice and institutional basis.

The Shenzhen Stock Exchange also said that in the past five years, the issuance scale of corporate bonds has continued to rise, the innovative product sequence has continued to enrich, and the pre-trial nuclear mechanism has operated smoothly and efficiently, laying a solid practical foundation for the full implementation of the registration system for public issuance of corporate bonds.