Recently, the Shanghai Stock Exchange ("SSE") has issued the Circular on Matters concerning Corporate Bond Swap Business, and the Shenzhen Stock Exchange ("SZSE") has also issued the Circular of the Shenzhen Stock Exchange on Matters concerning Corporate Bond Swap Business (the "Circulars"), both of which shall come into force as of the date of issuance.
Main contents of the Circulars are as follows: 1. Specify connotations of bond swap, and stick to the principle of market-oriented and law-based swap. 2. Formulate strict information disclosure standards to protect legitimate rights and interests of investors. 3. Regulate bond swap procedures to ensure the business is conducted in an orderly manner. In particular, the Circular puts forward clear requirements on information disclosure arrangements of the bond swap business: an issuer shall disclose a detailed bond swap scheme before the start date of a swap offer, and promptly disclose the swap results upon the expiration of offer term; and, a trustee of underlying bonds shall continuously pay attention to the swap matters, disclose a temporary report on entrusted management affairs in time, and prompt the holder of underlying bonds of relevant risks.