On November 1, SZSE released the Guidelines of Shenzhen Stock Exchange on Information Disclosure of Interim Reports on Asset-Backed Securities (hereinafter the “Guidelines”). It is another important measure adopted by SZSE to implement the self-regulation idea with information disclosure as its core, and continue to improve the quality of information disclosure of fixed-income products.
Since it implemented the filing system at the end of 2014, SZSE has seen steady development in its enterprise asset securitization business, with a total issuing scale of over CNY870 billion. The Guidelines aims to mainly solve the problems of timeliness, effectiveness and pertinence of information disclosure of interim reports on asset-backed securities. It has clearly specified the applicable situations, content to be disclosed and deadline requirements on the information disclosure of interim reports, which is of great significance to upgrading the duration information disclosure system of asset-backed securities, protecting investors’ legal rights and interests and improving the capabilities of market participants such as asset-backed plan managers (hereinafter the “managers”) and investors to identify and control risks.
The Guidelines has seven chapters consisting of 32 articles, including such chapters as General Provisions, Significant Events, Circular Buying, Holders’ Meeting, Information Disclosure on Other Events, Self-discipline Regulation and Supplementary Provisions, and provides the templates for announcement of 25 types of interim reports in the annex, realizing effective connection to the Information Disclosure Guidelines for Asset Securitization Business of Securities Companies and Subsidiaries of Fund Management Companies (hereinafter the “Information Disclosure Guidelines”) issued by the China Securities Regulatory Commission (CSRC). The main content of the Guidelines includes:
First, defining the responsibilities of information disclosers. The Guidelines clearly designates managers and credit rating agencies as direct obligors for information disclosure, and on the basis of CSRC’s Information Disclosure Guidelines, the Guidelines states that important providers of cash flow of underlying assets, asset appraisal agencies, cash flow forecast agencies and regulating banks are subjects who have the obligation to promptly provide relevant information to obligors for information disclosure.
Second, refining information disclosure requirements for significant events. The Guidelines has refined Article 19 Significant Events in CSRC’s Information Disclosure Guidelines, and added some significant events that are required to be disclosed, including changes in main provisions of special plan documents, failure to fulfill commitments, changes in ownership of underlying assets, attachment or freezing of relevant account and important adverse reports in the market.
Third, laying down procedural requirements for significant events. The Guidelines has further defined convening process of asset-backed securities holders’ meeting, resolution methods and announcement types, and requires the holders’ meeting to be witnessed by a lawyer. The Guidelines also requires relevant announcements to be promptly released before and after circular buying, suspension or resumption of trading and execution of cum rights articles, so as to effectively protect investors’ rights and interests.
Next, SZSE will continue to organize targeted training according to the unified arrangement of CSRC, interpret the Guidelines, guide relevant entities to correctly understand and execute the Guidelines, ensure the implementation of rules, further improve the effectiveness and normalization of disclosure of information on asset-backed securities and promote high-quality development of the market.