· Document Number：No. 8 [2018] of the Shanghai Stock Exchange

· Area of Law： Belt & Road Initiative

· Level of Authority： Industry Regulations

· Date issued：03-02-2018

· Effective Date：03-02-2018

· Issuing Authority： Shanghai Stock Exchange

· Status： Effective

Notice of the Shanghai Stock Exchange on Launching the Pilot Program of “Belt and Road” Bonds
(No. 8 [2018] of the Shanghai Stock Exchange)
All market participants:
For the purposes of implementing the spirit of the 19th CPC National Congress and the overall deployments in the Visions and Actions to Advance the Joint Construction of the Silk Road Economic Belt and 21st Century Maritime Silk Road (hereinafter referred to as the “Visions and Actions”) jointly issued by the National Development and Reform Commission, the Ministry of Foreign Affairs, and the Ministry of Commerce, promoting financing for the “Belt and Road,” and allowing the bonds markets of exchanges to play their role in serving the construction of the “Belt and Road,” in accordance with the Securities Law, the Measures for the Administration of the Offering and Trading of Corporate Bonds, the Listing Rules of the Shanghai Stock Exchange for Corporate Bonds, the Interim Measures of the Shanghai Stock Exchange for the Administration of the Non-Public Offering of Corporate Bonds, and other laws, regulations, departmental rules, regulatory documents, and relevant business rules, and under the overall planning in the Vision and Action Plan of the Shanghai Stock Exchange for Serving the Construction of the “Belt and Road” (2018-2020), you are hereby notified of the following matters on the Shanghai Stock Exchange (“SSE”)'s launching the pilot program of “Belt and Road” bonds:
I. For the purposes of this Notice, “Belt and Road” bonds include bonds of the following three categories:
(1) Government bonds issued on the SSE by government agencies of countries (or regions) along the “Belt and Road.”
(2) Corporate bonds issued on the SSE by enterprises and financial institutions from countries (or regions) along the “Belt and Road.”
(3) Corporate bonds issued on the SSE by domestic and foreign enterprises for the purpose of raising funds for the construction of the “Belt and Road.”
II. The arrangements for the issuance, listing and trading or quotation and transfer, and information disclosure of government bonds issued on the SSE by government agencies of countries (or regions) along the “Belt and Road” are as follows:
(1) Before issuance, an issuer shall submit the following documents to the SSE for recordation:
(a) The approval or authorization and other documents for the issuance of the bond in compliance with the laws of the country of the issuer.
(b) The prospectus for the bond, including but not limited to the issuance clauses, issuance arrangements, basic information on the issuer, economic and financial conditions of the issuer, information disclosure arrangements, and investor protection mechanism.
(c) The review opinion of the lead underwriter.
(d) The legal opinions issued by lawyers in China and the country (or region) of the issuer respectively.
(e) The documents reflecting the issuer's main economic data or financial condition.
(f) A credit rating report issued by a credit rating agency in China qualified for engaging in the securities business.
(g) Other documents required by the SSE.
The issuer shall, before each bond issue, disclose the aforesaid documents and an issuance plan on the website of the SSE or in other manners recognized by the SSE. The issuance plan shall specify the size of the bond issue, issuance period, issuance method, investors subscribing for the bond, and pricing principles, among others.
(2) The listing and trading or the quotation and transfer of government bonds on the SSE shall be governed by the Trading Rules of the Shanghai Stock Exchange, the Detailed Implementing Rules of the Shanghai Stock Exchange for Bond Trading, and other relevant trading rules.
(3) The issuer shall, as agreed in the bond's prospectus, disclose its main economic data or financial condition of the prior year and the significant events that affect the issuer's solvency, among others, in the duration of the bond.
III. The issuance and listing and trading or quotation and transfer on the SSE of corporate bonds issued by enterprises and financial institutions from countries (or regions) along the “Belt and Road” and corporate bonds issued by domestic and foreign enterprises for the purpose of raising funds for the construction of the “Belt and Road” shall be governed, mutatis mutandis, by the Measures for the Administration of the Offering and Trading of Corporate Bonds, the Listing Rules of the Shanghai Stock Exchange for Corporate Bonds, the Interim Measures of the Shanghai Stock Exchange for the Administration of the Non-Public Offering of Corporate Bonds, and other business rules.
IV. The funds raised through corporate bonds issued by domestic and foreign enterprises for the purpose of raising funds for the construction of the “Belt and Road” shall be used for investment in or construction or operation of “Belt and Road” projects, repayment of special interest-bearing debts incurred in “Belt and Road” projects, or business conducted with countries (or regions) along the “Belt and Road.” Provided that the aforesaid precondition is met, not more than 30% of the funds raised may be used to supplement working capital and repay bank loans.
“Belt and Road” projects shall be those identified by the development and reform departments or other functional departments of the state at or above the provincial level or projects in line with the “Belt and Road” initiative for which the issuers have entered into agreements with the functional departments of governments of or enterprises from countries (or regions) along the “Belt and Road” and obtained the necessary affirmative replies from the relevant regulators.
In the duration of a bond, the issuer shall disclose the use of the funds raised and the progress of the “Belt and Road” construction projects, among others, in the periodic reports.
V. Where the funds raised through a “Belt and Road” bond issued on the SSE involve cross-border capital movement, the issuer shall disclose in the prospectus a plan on the use of the raised funds, including but not limited to the size of the bond issue, plan for outbound remittance or domestic use, and amount and frequency of foreign exchange purchase, and comply with the rules of the relevant regulators.
VI. The SSE will arrange for special personnel to take charge of the acceptance and examination of “Belt and Road” bond applications to improve the efficiency of the listing or quotation of “Belt and Road” bonds.
VII. The SSE will create a “Belt and Road” bonds block, cooperate with stock index compilers in issuing an index of “Belt and Road” bonds in due time, and improve the investment and financing mechanisms for the construction of the “Belt and Road.”
VIII. The SSE encourages the development of “Belt and Road” green bonds, “Belt and Road” renewable bonds, and other varieties of bonds, based on “Belt and Road” bonds.
IX. The SSE encourages various financial institutions and their financial products issued to investors, the Social Security Fund, enterprise annuities, and other pension funds, charitable funds and other social welfare funds, qualified foreign institutional investors (QFIIs), and RMB qualified foreign institutional investors (RQFIIs), among others, to invest in “Belt and Road” bonds.
X. The listing and trading or quotation and transfer on the SSE of asset-backed securities and other varieties of bonds used for the construction of the “Belt and Road” shall be governed, mutatis mutandis, by this Notice.
XI. Matters not covered in this Notice on the listing and trading or quotation and transfer of “Belt and Road” bonds shall be governed by the relevant rules of the SSE.
XII. This Notice shall be subject to interpretation by the SSE.
XIII. This Notice shall come into force on the date of issuance.
Shanghai Stock Exchange
March 2, 2018