In order to implement the requirements of “the four awes (stand in awe of the market, rule of law, professionalism and risks) and one joint force (The capital market’s development needs all the efforts made by all sides)” of the CSRC, SZSE issued Q&As on Relevant Self-discipline Measures on “Brought into Regulation upon Application” in October 2019, to clarify the specific circumstances where securities companies may trigger measures such as “inspection/self-inspection measures” or “suspension of acceptance or handling of related business” due to their past practices in corporate bond business.
Since the release of the Q&As, SZSE has found the following problems and circumstances in the past practices of some securities companies in the issuance review and duration supervision of SZSE and in the daily regulation of regional CSRC bureaus. First, failure to perform duties diligently in the bond underwriting business: they have not fully verified the authenticity and accuracy of the public offering documents, and were investigated by the CSRC and its regional offices for suspected violation of laws and regulations. Second, failure to perform due diligence: they were subject to administrative regulations and administrative penalties because they failed to detect illegal acts such as false records of the issuer’s financial data. Third, they were repeatedly subject to administrative regulations such as warning letters and instructions to rectify because of the failure to prudently verify the professional opinions issued by other intermediaries and the inaccurate disclosure of information in the prospectus. In view of the above circumstances, in order to strengthen the joint force of regulation, SZSE and SSE have cooperated in regulation following the unified arrangement of the CSRC, and adopted self-discipline measures for self-inspection, suspension of acceptance or handling of related business for relevant securities companies.
After the formal implementation of the new Securities Law, SZSE took the lead in implementing the registration-based system on public offering of corporate bonds. SZSE fully supports enterprises in making efficient use of the bond market of SZSE in accordance with the law, steps up efforts to stress the responsibilities of intermediaries at the same time, and further implements relevant standards and requirements for intermediaries in corporate bond undertaking, application, issuance, duration management and other business in compliance with regulations. Next, SZSE will continue to resolutely implement the bond issuance and listing review system centering on information disclosure, adhere to the principle of “Brought into Regulation upon Application”, and urge securities companies and other intermediaries to fulfill their own responsibilities. In addition, we will give full play to our role as a gatekeeper, make efforts to strengthen the risk prevention and control at the source, and effectively protect the legitimate rights and interests of investors. We will also maintain a law-based and orderly bond market environment to better promote the high-quality development of the bond market on SZSE.