NDRC: China to adopt registration scheme for corporate bond issuance from March 1

On March 1, the National Development and Reform Commission of China issued a notice on the full-scale implementation of the registration system for corporate bond issuance.

On March 1, the National Development and Reform Commission of China issued a notice on the full-scale implementation of the registration system for corporate bond issuance.

According to the notice, the issuance of corporate bonds has changed from an approval-based system to a registration-based one. The NDRC is the statutory registration agency for corporate bonds. The issuance of corporate bonds should be registered with the NDRC by the law.

The notice also requires that the corporate bond issuers should have a sound and well-functioning organization. The firms’ average distributable profits over the last three years must be sufficient to pay one year of interest. Issuers of the enterprise bonds should have a reasonable asset-debt structure and normal cash liquidity, with the raised funds encouraged to invest in projects that conform to the nation’s macro-control policies and industrial policies.

Besides, requirements for information disclosure and responsibilities of intermediaries, as well as the regulatory duties of the provincial development and reform commissions, were also strengthened under the new rule.

Disclaimer: This is an article created by Michael Liang for Chinasdg.org. You can find the original article here: https://chinasdg.org/2020/06/06/ndrc-china-to-adopt-registration-scheme-for-corporate-bond-issuance-from-march-1/.

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