Administrative Measures for the Issuance and Trading of Corporate Bonds
Administrative Measures for the Issuance and Trading of Corporate Bonds
Administrative Measures for the Issuance and Trading of Corporate Bonds
Order of the China Securities Regulatory Commission No.113
January 15, 2015
The Administrative Measures for the Issuance and Trading of Corporate Bonds, adopted at the 65th executive meeting of the chairman of the China Securities Regulatory Commission on November 15, 2014, are hereby promulgated for implementation as of the date of promulgation.
Xiao Gang, Chairman of the China Securities Regulatory Commission
Administrative Measures for the Issuance and Trading of Corporate Bonds
Chapter I General Provisions
Article 1 The Administrative Measures for the Issuance and Trading of Corporate Bonds (hereinafter referred to as the "Measures") are formulated in accordance with the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), and other relevant laws and regulations for the purposes of regulating the issuance, trading or transfer of corporate bonds, and protecting the lawful rights and interests of investors and the social public interests.
Article 2 Where, within the territory of the People's Republic of China, corporate bonds are publicly issued and traded or transferred on stock exchanges or national equities exchange and quotations (hereinafter referred to as the "NEEQ") or corporate bonds are non-publicly issued and underwritten or sold by issuers themselves in accordance with the provisions of the Measures or transferred on stock exchanges, NEEQ, the Inter-agency Quotation and Service System for Privately Offered Products, or the over-the-counter market of securities companies, the Measures shall apply.
The provisions otherwise prescribed by laws, regulations and the China Securities Regulatory Commission (hereinafter referred to as the "CSRC") shall prevail.
For the purpose of the Measures, corporate bonds refer to the negotiable securities issued by a company according to statutory procedures with an agreement of paying back the principal plus interest within a period of time.
Article 3 Corporate bonds can be issued in a public manner or in a non-public manner.
Article 4 Issuers and other persons that are obligated to disclose information shall perform the disclosure obligation in a timely and fair manner and the disclosed or submitted information must be authentic, accurate and complete, and shall be free from any false records, misleading statements, or major omissions.
Article 5 Issuers and their controlling shareholders or actual controllers shall act with integrity and good faith and the directors, supervisors and senior officers of issuers shall act with due diligence and safeguard the rights that bond holders are entitled to as prescribed by law and as agreed upon in the bond prospectus.
Article 6 The auditors' report, assets appraisal report and credit rating report that are quoted by the bond prospectus and other information disclosure documents shall be produced by an institution qualified for securities services.
The written legal opinions quoted by the bond prospectus shall be produced by a law firm, and shall bear the signatures of two practicing lawyers and the head of the law firm.
Article 7 The underwriting institutions, credit rating institutions, trustees, accounting firms, asset appraisal institutions, law firms and other professional institutions and persons that provide services for the issuance of corporate bonds shall act with due diligence, strictly observe practice criterions and regulatory rules, and perform obligations in accordance with the relevant provisions and agreement.
Article 8 Issuers, underwriting institutions and the relevant personnel thereof shall not violate fair competition, transfer benefits, seek improper benefits directly or indirectly or otherwise impair the market order in the course of issuance pricing and placement.
Article 9 Verification and approval of the issuance of corporate bonds by the CSRC or the record-filing of the issuance of corporate bonds with the Securities Association of China in accordance with the Measures does not mean that the CSRC or the Securities Association of China has made judgment or guarantee as to the business risks, debt repayment risks or lawsuit risks of issuers and the investment risks or proceeds of the corporate bonds. Investors shall bear the investment risks of corporate bonds on their own.
Article 10 The CSRC shall conduct supervision and administration over the activities of public issuance, non-public issuance, trading or transfer of corporate bonds in accordance with the law.
The securities self-disciplinary organizations may conduct self-disciplinary management of the listing for trading or transfer, non-public issuance and transfer, underwriting, due diligence, credit rating, entrusted management, and credit enhancement of corporate bonds in accordance with the relevant provisions.
The securities self-disciplinary organizations shall formulate the relevant business rules, specifying provisions on underwriting, record-filing, listing for trading or transfer, information disclosure, investor suitability management, holders' meeting, and entrusted management of corporate bonds, which shall be submitted to the CSRC for approval.
Chapter II Issuance and Trading or Transfer
Section 1 General Stipulations
Article 11 For issuance of corporate bonds, an issuer shall make a resolution on the following matters in accordance with the relevant provisions of the Company Law or the articles of association:
1 number of bonds to be issued;
2 method of issuance;
3 term of bonds;
4 usage of proceeds;
5 period of validity of the resolution; and
6 other matters that shall be specified in accordance with laws, regulations and articles of association.
For issuance of corporate bonds, any arrangement for the credit enhancement mechanism or debt repayment guarantee measures shall also be specified in the resolution.
Article 12 Listed companies or the non-listed public companies whose shares are publicly transferred may issue corporate bonds to which the terms such as warrants or convertibility into the relevant shares are attached. Shareholders of listed companies or the non-listed public companies whose shares are publicly transferred may issue corporate bonds to which the terms of convertibility into the shares of the listed companies or the non-listed public companies are attached. Commercial banks and other financial institutions may issue corporate bonds with the write-down clause in accordance with the relevant provisions.
The issuance of the corporate bonds to which the terms of warrants or convertibility into shares are attached by listed companies shall comply with the Administrative Measures for the Issuance of Securities by Listed Companies, the Interim Administrative Measures for the Issuance of Securities of Listed Companies on the Growth Enterprise Market and other relevant provisions.
The issuance of the corporate bonds to which the terms of warrants or convertibility into shares are attached by non-listed public companies whose shares are publicly transferred shall be provided for by the CSRC separately.
Article 13 All the directors, supervisors, senior officers of issuers shall affix their signatures to the bond prospectus, making the commitment that there is no false record, misleading statement, or major omission, and that they shall bear appropriate legal liability unless they can prove that they have no fault.
Article 14 For the purpose of the Measures, qualified investors shall have the appropriate risk identification and tolerance capability, be aware of and undertake the investment risks of corporate bonds and meet the following qualification requirements:
1 financial institutions established upon approval by the relevant financial regulatory authorities, including securities companies, fund management companies and their subsidiaries, futures companies, commercial banks, insurance companies and trust companies, or the private equity fund managers registered with the Asset Management Association of China (hereinafter referred to as the "AMAC");
2 wealth management products issued to investors by the above financial institutions, including without being limited to the asset management products of securities companies, the products of fund and fund subsidiaries, the asset management products of futures companies, the wealth management products of banks, insurance products, trust products and the private equity fund recorded with the AMAC;
3 enterprise or public institution legal persons or partnerships with net assets not less than CNY10 million;
4 qualified foreign institutional investors ("QFIIs") or RMB qualified foreign institutional investors ("RQFIIs");
5 social security funds, enterprise annuities and other pension funds, charitable funds and other social non-profit funds;
6 individual investors with financial assets under each of their names not less than CNY3 million; and
7 other qualified investors accredited by the CSRC.
For the purpose of the preceding paragraph, financial assets include bank deposits, stocks, bonds, fund units, asset management schemes, bank wealth management products, trust schemes, insurance products, and futures interests.
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