The Securities Association of China ("SAC") has recently issued the Measures for Evaluation of the Practicing Capacity of Securities Companies for Corporate Bond Business (for Trial Implementation) (the "Measures"), immediately effective from the date of issuance. The first evaluation of the practicing capacity of securities companies for corporate bond business will be initiated in 2020.
Divided into five chapters, including general provisions, evaluation indicators, scoring method, evaluation period and evaluation categories, and supplementary provisions, the Measures state that five groups of indicators will be utilized in a capacity evaluation, namely indicators measuring a securities company's basic capacity to provide guarantee for corporate bonds, indicators assessing its capacity to carry out corporate bond business, indicators judging its capacity for compliance in corporate bond business, indicators measuring practical effects of risk control measures taken in corporate bond projects, and indicators assessing its capacity to serve national strategies. The indicators measuring the basic capacity to provide guarantee for corporate bonds comprise the indicator on the development of corporate bond systems, the indicator on the percentage of staff members that have engaged in corporate bond business for more than three years, and the indicator on the percentage of staff members working on internal control of corporate bonds, while the indicators assessing the capacity to carry out corporate bond business include the indicator on revenues derived from corporate bond business, the indicator on the number of corporate bond projects for which it serves as the lead underwriter, and the indicator on the value of the underwritten corporate bonds.