Viewpoint... "Pilot Guidelines for Cross-border Bond Listing on the Greater Bay Area Bond Platform" released.
Published:
2022-12-19
On December 16, 2022, under the unified leadership of the China Securities Regulatory Commission, the Shenzhen Stock Exchange (the "Shenzhen Stock Exchange") issued the "Guidelines for the Pilot Listing of Cross-Border Bonds on the Greater Bay Area Bond Platform" (hereinafter referred to as the "Guidelines for the Pilot Listing"). Start the pilot work of listing services for cross-border bond products on the Greater Bay Area Bond Platform. Under the continuous interest rate hike by the Federal Reserve and the liquidity crisis of Chinese housing enterprises, the Chinese overseas debt market has entered a downturn (according to Bloomberg data, the issuance of Chinese US dollar debt has dropped by more than 40% compared with the same period last year). Considering the amount of funds and financing costs, many securities dealers and issuers have changed the approved overseas debt into offshore RMB bond issuance. The issuance of the Shenzhen Stock Exchange's pilot listing guidelines has added new vitality to the issuance of offshore people's bonds and the internationalization of the RMB. In order to facilitate readers to understand the listing pilot guidelines more clearly, this article will sort out the listing pilot guidelines of the Shenzhen Stock Exchange from the aspects of bond platform positioning, service object and scope, service requirements and methods. 1. Bond Platform Positioning During the pilot period, the Greater Bay Area Bond Platform only provided listing services for cross-border bonds. The transaction transfer of cross-border bonds and the registration and settlement services are still carried out through the relevant overseas financial infrastructure path. 2. listing service object (I) Issuer: 1. Domestic enterprises and overseas enterprises under their control that have completed the registration of overseas issuance and have been approved by the competent authorities for the amount of external debt; 2. An enterprise registered in Hong Kong, China, with an international rating of investment grade or a domestic rating of AAA; 3. Other issuers recognized by the Shenzhen Stock Exchange. (II) investors: Cross-border bonds can be subscribed for and registered with the Greater Bay Area Bond Platform: 1. Domestic institutional investors; 2. Institutional investors in Hong Kong, China. (III) bond products: The cross-border bonds referred to in the listing pilot guidelines are bond products issued outside the the People's Republic of China for professional institutional investors. In the notice issued by the Shenzhen Stock Exchange, it was made clear that at the initial stage of the pilot, cross-border bonds were limited to offshore RMB bonds issued by designated issuers in Hong Kong, China, for professional institutional investors. It can be seen that the scope of services of the Shenzhen Stock Exchange will gradually expand from Hong Kong dim sum bonds to other varieties of cross-border bonds. 3. Listing Service Scope The listing trial services provided by the Shenzhen Stock Exchange include: 1. Display of cross-border bond names, maturities, coupon rates and other elements; 2. Cross-border bond information disclosure; 3. Cross-border bond issuance online roadshow; 4. Other services provided by Shenzhen Stock Exchange. Taking into account the technical preparation of the market and its own business, the Shenzhen Stock Exchange has suspended the implementation of the online meeting tool service in Article 16 of the listing pilot guidelines, and the specific implementation time will be notified by the Shenzhen Stock Exchange separately. 4. Listing Service Requirements For cross-border bonds listed on the Shenzhen Stock Exchange, the issuer shall: ♦1. Legal completion of cross-border bond issuance; ♦2. Submit the following application materials (which can be written in Chinese or English, and the text agreed to be issued in the issuance document shall prevail in case of ambiguity): a. Application for listing of cross-border bonds; B. Cross-border bond listing announcement; c. Resolutions of the issuer's competent decision-making body (board of directors, shareholders' meeting or general meeting) on the application for listing of cross-border bonds; d. A copy of the issuer's articles of association and business license (copy) or registration certificate (if applicable); e. Cross-Border Bond Prospectus (Issue Circular); f. Financial reports and audit reports, credit enhancement measures documents (if any), rating reports (if any), issuance results announcements and other issuance documents; g. Other materials required by Shenzhen Stock Exchange. ♦3. Signing a service agreement with the Shenzhen Stock Exchange; ♦4. If the issuer has the obligation of continuous information disclosure and is listed (listed) on other exchanges at the same time, the information shall be disclosed simultaneously. 5. termination of listing 1. Full repayment, full exchange or conversion of cross-border bonds; 2. The issuer is dissolved or declared bankrupt by the court; 3. The court approves the bankruptcy reorganization plan or the bankruptcy settlement agreement; 4. The issuer applies for the termination of the listing of the bonds; 5. Other circumstances specified by the Shenzhen Stock Exchange. The listing pilot guidelines also stipulate that if the issuer violates the guidelines or the listing service agreement and the circumstances are serious, the Shenzhen Stock Exchange will suspend or terminate the service early. 6. dispute resolution mechanism If the issuer, investors and intermediaries of cross-border bonds have disputes over the disclosure of cross-border bond information, they shall be dealt with in accordance with the resolution mechanism agreed in the issuance documents. 7. listing charges The Shenzhen Stock Exchange does not charge a fee for cross-border bond listing services. The above are the main contents of the listing pilot guidelines. If you need more information, it is recommended to pay attention to the information published on the official website of the Shenzhen Stock Exchange.
On December 16, 2022, under the unified leadership of the China Securities Regulatory Commission, the Shenzhen Stock Exchange (the "Shenzhen Stock Exchange") issued the "Guidelines for the Pilot Listing of Cross-Border Bonds on the Greater Bay Area Bond Platform" (hereinafter referred to as the "Guidelines for the Pilot Listing"). Start the pilot work of listing services for cross-border bond products on the Greater Bay Area Bond Platform. Under the continuous interest rate hike by the Federal Reserve and the liquidity crisis of Chinese housing enterprises, the Chinese overseas debt market has entered a downturn (according to Bloomberg data, the issuance of Chinese US dollar debt has dropped by more than 40% compared with the same period last year). Considering the amount of funds and financing costs, many securities dealers and issuers have changed the approved overseas debt into offshore RMB bond issuance. The issuance of the Shenzhen Stock Exchange's pilot listing guidelines has added new vitality to the issuance of offshore people's bonds and the internationalization of the RMB. In order to facilitate readers to understand the listing pilot guidelines more clearly, this article will sort out the listing pilot guidelines of the Shenzhen Stock Exchange from the aspects of bond platform positioning, service object and scope, service requirements and methods.
1. Bond Platform Positioning
During the pilot period, the Greater Bay Area Bond Platform only provided listing services for cross-border bonds. The transaction transfer of cross-border bonds and the registration and settlement services are still carried out through the relevant overseas financial infrastructure path.
2. listing service object
(I) Issuer:
1. Domestic enterprises and overseas enterprises under their control that have completed the registration of overseas issuance and have been approved by the competent authorities for the amount of external debt;
2. An enterprise registered in Hong Kong, China, with an international rating of investment grade or a domestic rating of AAA;
3. Other issuers recognized by the Shenzhen Stock Exchange.
(II) investors:
Cross-border bonds can be subscribed for and registered with the Greater Bay Area Bond Platform:
1. Domestic institutional investors;
2. Institutional investors in Hong Kong, China.
(III) bond products:
The cross-border bonds referred to in the listing pilot guidelines are bond products issued outside the the People's Republic of China for professional institutional investors. In the notice issued by the Shenzhen Stock Exchange, it was made clear that at the initial stage of the pilot, cross-border bonds were limited to offshore RMB bonds issued by designated issuers in Hong Kong, China, for professional institutional investors. It can be seen that the scope of services of the Shenzhen Stock Exchange will gradually expand from Hong Kong dim sum bonds to other varieties of cross-border bonds.
3. Listing Service Scope
The listing trial services provided by the Shenzhen Stock Exchange include:
1. Display of cross-border bond names, maturities, coupon rates and other elements;
2. Cross-border bond information disclosure;
3. Cross-border bond issuance online roadshow;
4. Other services provided by Shenzhen Stock Exchange.
Taking into account the technical preparation of the market and its own business, the Shenzhen Stock Exchange has suspended the implementation of the online meeting tool service in Article 16 of the listing pilot guidelines, and the specific implementation time will be notified by the Shenzhen Stock Exchange separately.
4. Listing Service Requirements
For cross-border bonds listed on the Shenzhen Stock Exchange, the issuer shall:
♦1. Legal completion of cross-border bond issuance;
♦2. Submit the following application materials (which can be written in Chinese or English, and the text agreed to be issued in the issuance document shall prevail in case of ambiguity):
a. Application for listing of cross-border bonds;
B. Cross-border bond listing announcement;
c. Resolutions of the issuer's competent decision-making body (board of directors, shareholders' meeting or general meeting) on the application for listing of cross-border bonds;
d. A copy of the issuer's articles of association and business license (copy) or registration certificate (if applicable);
e. Cross-Border Bond Prospectus (Issue Circular);
f. Financial reports and audit reports, credit enhancement measures documents (if any), rating reports (if any), issuance results announcements and other issuance documents;
g. Other materials required by Shenzhen Stock Exchange.
♦3. Signing a service agreement with the Shenzhen Stock Exchange;
♦4. If the issuer has the obligation of continuous information disclosure and is listed (listed) on other exchanges at the same time, the information shall be disclosed simultaneously.
5. termination of listing
1. Full repayment, full exchange or conversion of cross-border bonds;
2. The issuer is dissolved or declared bankrupt by the court;
3. The court approves the bankruptcy reorganization plan or the bankruptcy settlement agreement;
4. The issuer applies for the termination of the listing of the bonds;
5. Other circumstances specified by the Shenzhen Stock Exchange.
The listing pilot guidelines also stipulate that if the issuer violates the guidelines or the listing service agreement and the circumstances are serious, the Shenzhen Stock Exchange will suspend or terminate the service early.
6. dispute resolution mechanism
If the issuer, investors and intermediaries of cross-border bonds have disputes over the disclosure of cross-border bond information, they shall be dealt with in accordance with the resolution mechanism agreed in the issuance documents.
7. listing charges
The Shenzhen Stock Exchange does not charge a fee for cross-border bond listing services.
The above are the main contents of the listing pilot guidelines. If you need more information, it is recommended to pay attention to the information published on the official website of the Shenzhen Stock Exchange.
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