The General Office of the National Development and Reform Commission ("NDRC") has recently issued the Circular on Initiating the Credit Assessment of Lead Underwriters and Credit Rating Agencies for Corporate Bonds for the Year 2018 (the "Circular").
The Circular states that if an underwriter has been involved as the lead underwriter in the underwriting of corporate bonds, or the corporate bonds it has underwritten as the lead underwriter have not matured, during the period from January 1, 2018 to December 31, 2018, this underwriter will be covered under this credit assessment; the credit assessment will also target the rating agencies with the qualification for credit rating business for corporate bonds, as recognized by the NDRC. In addition, the Circular expressly states that the China Central Depository and Clearing Co., Ltd. ("CCDC") and the National Association of Financial Market Institutional Investors ("NAFMII") will be entrusted to respectively take charge of the annual credit assessment of lead underwriters and of credit rating agencies for corporate bonds. Three categories of indicators, namely indicators in relation to credit behaviors, business capability indicators, and indicators regarding comments of experts and institutions, will be deployed in the assessment. Moreover, the Circular stresses that the assessment outcomes will be publicly released on the "CreditChina" website, and be included in the credit records of intermediary agencies of corporate bonds.