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Chambers Greater China Region Guide 2022: Capital Markets: Debt & Equity (PRC Firms)

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Haiyang Zhao
Yijing Hu
Yuan Wang
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Chambers Greater China Region Guide 2022: Capital Markets: Debt & Equity (PRC Firms)
2022年钱伯斯大中华区指南:资本市场债务和股权(中资律师事务所)
 

During the 14th Five-Year Plan period, China's economic development has entered a new development stage where "domestic and foreign markets can boost each other, with the domestic market as the mainstay". The deepening reform of China's capital market has accelerated, the capital market system structure has become clearer, the regulatory policies have been further improved, and the ability to serve the real economy has been further enhanced.
随着十四五期间中国经济发展进入“以国内大循环为主体、国内国际双循环相互促进”的新发展格局,中国资本市场深化改革加速落地,资本市场体系结构更加清晰,监管政策进一步完善,服务实体经济的能力进一步增强。

Steady progress in the reform of the registration system which started to shape a multi-level c apital market system
注册制改革稳步推进,多层次资本市场体系初步形成
 

In terms of regulatory policies, ever since the National People's Congress authorised the State Council to implement the registration system reform on the Shanghai and Shenzhen Stock Exchanges in 2016, the Shanghai Stock Exchange established the Science and Technology Innovation Board (“SSE STAR”) and piloted the registration system in 2019, the Shenzhen Stock Exchange's ChiNext Market (“ChiNext”) completed the registration system reform in June 2020 and the Beijing Stock Exchange was established with the registration system in September 2021. At present, the registration system reform of the main board of the Shanghai and Shenzhen Stock Exchanges is progressing steadily. With the market-wide implementation of the registration system in the capital markets, stock issuance in mainland China will enter an era of registration system from the approval system previously. The new Securities Law clarifies the responsibilities of regulators under the registration system, simplifies issuance conditions, stipulates the information disclosure obligations of market participants such as issuers and intermediaries, and determines the securities representative litigation mechanism. The above rules lay the grounds for the implementation of the systematic and comprehensive registration system.  
在监管政策方面,自2016年全国人大授权国务院在沪深交易所实行注册制改革以来,2019年上交所设立科创板并试点注册制,2020年6月深交所创业板完成注册制改革,2021年9月北交所设立并实施注册制。目前,沪深交易所主板的注册制改革正在稳步推进。随着资本市场全市场注册制的实施,中国境内的股票发行将由核准制进入注册制时代。新《证券法》明确了注册制下监管机构的职责,简化了发行条件,规定了发行人及中介机构等市场参与主体的信息披露义务,确定了证券代表人诉讼机制,上述规则设计从制度层面为全面注册制的实施提供了依据。

In terms of the capital market framework, with the cancellation of the selection layer of the New Third Board and the establishment of the Beijing Stock Exchange, China's capital markets have started to form a multi-level capital market system composed of floor trading markets represented by the Beijing, Shanghai and Shenzhen Stock Exchanges, and curb trading markets represented by the New Third Board and the national regional equity trading markets. The positioning of each market board is different but interconnected, forming a “progressive” market system with effective mechanism regarding listing and delisting. The details are as follows:
在市场体系方面,随着新三板取消精选层及北交所的设立,中国资本市场初步形成了由京沪深交易所为代表的场内市场及新三板、全国区域性股权交易市场为代表的场外市场组成的多层次资本市场体系。各个市场板块定位不同、互联互通,形成“层层递进”“有进有退”的市场体系,具体如下:

• The New Third Board and the national regional equity trading markets serve early-stage small and medium-sized enterprises (“SMEs”).
新三板及全国区域性股权交易市场服务于初创期中小企业。

• The Beijing Stock Exchange serves innovative SMEs.
北交所服务于创新型中小企业。

• The SSE STAR board serves companies in high-tech industries and strategic emerging industries, and the ChiNext serves innovative and entrepreneurial enterprises.
上交所科创板服务于高科技行业和战略行业的企业,深交所创业板服务于创新创业企业。

• The main board of Shanghai and Shenzhen Stock Exchanges serves large blue-chip enterprises.
沪深交易所主板服务于大型蓝筹企业。

Enterprises which choose to be listed on the New Third Board can apply for listing on the Beijing Stock Exchange later. If they meet the listing requirements of the Shanghai and Shenzhen Stock Exchanges, they can apply to transfer to the SSE STAR and the ChiNext. At the same time, in order to meet the requirements of the registration system reform and the normalised delisting, regulatory authorities have further improved the delisting standards and established a market-oriented and diversified delisting standard system covering the categories of “financial issues, transactional issues, regulatory issues, and issues concerning material breach of law”. If a company listed on any board in Beijing, Shanghai and Shenzhen triggers the delisting indicator, it may be transferred from the floor trading market to the curb trading market - the New Third Board's delisted company board.
企业选择在新三板挂牌后可以申请到北交所上市,如果满足沪深交易所上市条件,则可以申请转板至上交所科创板、深交所创业板。同时,为适应注册制改革和常态化退市的要求,监管机构进一步完善了退市标准,建立了“财务类、交易类、规范类、重大违法类”市场化和多元化的退市标准体系。如果在京沪深任一板块上市的公司触发退市指标,则可能由交易所场内市场转入新三板退市公司板块场外市场交易。

Supervision and cooperation on overseas listing further strengthened, with the level of opening-up continuously improved
境外上市监管与合作进一步加强,对外开放水平持续提升
 

With the crisis of confidence caused by several default incidents of Chinese concept stocks since 2020, and the implementation of the Holding Foreign Companies Accountable Act by the United States to strengthen the control and supervision of foreign companies' listing in the United States, regulatory authorities in China have become increasingly concerned with the risk of national security issues associated with overseas listing of domestic Chinese enterprises, and the necessity of comprehensive supervision of such listings has become particularly prominent. Regulatory policies and regulations on domestic and overseas regulatory cooperation have subsequently been issued.
随着2020年以来数起中概股“暴雷”事件引发的信任危机,以及美国通过实施《外国公司问责法案》以加强对外国公司在美上市的管控监督,境内监管部门对境外上市所引发的国家安全泄露风险日益担忧和关注,对境内企业境外上市实施全面监管的必要性尤为凸显,监管政策及境内外监管合作的相关规定也随之相继出台。

In terms of regulatory policies, the overseas listing of domestic enterprises will officially enter the era of comprehensive filing system. In December 2021, the China Securities Regulatory Commission (“CSRC”) issued a statement on the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (“Administration Provisions”), and Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (“Filing Measures”) to solicit public comments.
在监管政策方面,境内企业境外上市即将进入全面备案制时代。2021年12月,中国证监会就《国务院关于境内企业境外发行证券和上市的管理规定(草案征求意见稿)》“《管理规定》”)和《境内企业境外发行证券和上市备案管理办法(征求意见稿)》(“《备案办法》”)向社会公开征求意见。

On the one hand, the introduction of the Administration Provisions and the Filing Measures has made the principled supervision of overseas listings institutionalised and transparent. According to these rules, whether domestic companies are listed overseas directly (H-share listing) or indirectly (using a red-chip structure), the domestic review procedures will no longer be differentiated, and the filing system will be implemented uniformly.
一方面,《管理规定》及《备案办法》的出台使得境外上市的原则性监管予以制度化和透明化。根据该等规则,境内企业无论是采取直接(H股上市)或间接(搭建境外红筹架构)的方式在境外上市,其境内审核程序将不再予以区分,均统一实施备案制度。

On the other hand, due to national security concerns caused by overseas listing of domestic enterprises, the aforementioned rules and other rules and regulations which took effect in 2022, including the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Edition) (the “2021 FDI Negative List”) and Cybersecurity Review Measures, have jointly established the collaborative supervision model across multiple departments, and the security review procedure from the perspective of foreign investment security, cybersecurity/data security and other national security. The 2021 FDI Negative List has clarified that domestic enterprises engaging in businesses in fields prohibited from investment in the 2021 FDI Negative List shall be reviewed and approved by the relevant competent state authorities for issuing shares and going public for trading overseas; The Cybersecurity Review Measures have clarified that Chinese network platform operators holding more than 1 million individuals’ personal information must apply for a cybersecurity review prior to listing overseas, and that competent authorities may initiate a cybersecurity review where there are other situations that may affect national security. However, the legality of the VIE structure, the review standards for foreign investment, and the standards and boundaries of cybersecurity review still lack reference and specific rules for implementation.
另一方面,出于对境内企业境外上市对国家安全造成影响的担忧,前述规则及2022年新生效的《外商投资准入特别管理措施(负面清单)(2021年版)》《网络安全审查办法》等规则共同建立和明确了多部门之间的协同监管模式,从外商投资安全、网络安全/数据安全等国家安全的角度确立了安全审查程序:前者明确了“从事外资准入负面清单禁止投资领域业务的境内企业到境外发行股份并上市交易”应当经国家有关主管部门审核同意;后者则明确了“掌握超过100万用户个人信息的网络平台运营者赴国外上市”需主动申报审查,其他可能影响国家安全的情形亦可能被主管部门实施被动审查。但遗憾的是,有关VIE架构合法性、外商投资的审查标准、网络安全审查的标准和界限仍缺乏可供执行和参考的具体细则进一步规范和明晰。

In terms of regulatory cooperation, China and the United States have recently conducted dialogues and consultations on the audit of Chinese concept stocks, and discussed the issue of reasonable and legal inspections of Chinese accounting firms engaged in Chinese concept stocks auditing in China. The Provisions on Strengthening the Confidentiality and File Management Work Related to the Overseas Issuance and Listing of Securities by Domestic Enterprises (Draft for Comment) provides for approval/filing procedure of classified or sensitive information, intending to implement confidentiality and filing requirements for domestic enterprises prior to their providing information to securities service institutions, overseas institutions and individuals, thus providing institutional guarantee for improving cross-border supervision cooperation arrangements and carrying out cross-border supervision cooperation safely and efficiently.
在监管合作方面,近期中美监管双方就中概股审计问题进行对话与磋商,探讨合情、合理、合法地在中国对从事中概股审计的中国会计师事务所开展检查的问题。《关于加强境内企业境外发行证券和上市相关保密和档案管理工作的规定(征求意见稿)》的出台,意在将保密和档案管理要求落实在境内企业向证券服务机构、境外机构和个人提供信息之前,对涉密或敏感资料实施批准/备案监管,从而为完善跨境监管合作安排、安全高效开展跨境监管合作提供制度保障。

Step-by-step establishment of a unified debt market supervision system, and the introduction of new debt products
债券市场统一监管体制逐步建立,债券产品推陈出新
 

In terms of debt supervision, since the implementation of the new Securities Law in 2020, a unified registration system has been implemented in the issuance review of corporate bonds. Ever since, the registration system has been implemented in the issuance review of corporate bonds in the exchange bond market, which were previously supervised by the CSRC, and enterprise bonds, which used to be supervised by the National Development and Reform Commission (“NDRC”). The new supervision approach of those bonds is now similar to that of financial corporate bonds in the interbank market supervised by the People's Bank of China (“PBOC”). In addition, in order to strengthen the information disclosure and supervision system in the corporate bond market, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law (the “Opinions”) in July 2021. Six ministries, including the PBOC, jointly issued the Guiding Opinions on Promoting the Reform and Opening-up and High-Quality Development of the Corporate Bond Market (the “Guiding Opinions”) in August 2021. The Opinions and the Guiding Opinions aim to promote the convergence of the rules and regulations of the interbank bond market and the exchange bond market, to unify the disclosure requirements for the issuance and duration of corporate bonds and allow the unified law enforcement of the bond market by the CSRC. Therefore, a unified supervision system in the corporate bond market is taking shape step by step.
在债券监管方面,2020年新《证券法》实施后,公司信用类债券发行审核统一实行注册制。原中国证监会监管的证券交易所公司债券、国家发改委监管的企业债券自此与人民银行监管的银行间市场非金融企业债务融资工具一样在发行审核中实施注册制。另外,为加强公司信用类债券市场的信息披露及统一监管体制,中共中央办公厅、国务院办公厅于2021年7月发布《关于依法从严打击证券违法活动的意见》,中国人民银行等六部委于2021年8月联合发布《关于推动公司信用类债券市场改革开放高质量发展的指导意见》,推动银行间债券市场和交易所债券市场制度规则分类趋同,统一公司信用类债券发行和存续期间的信息披露要求,并由中国证监会负责债券市场统一执法,公司信用类债券市场统一监管体制逐步建立。

In terms of debt products, regulatory rules for the corporate bond market have been further improved, and new products have been introduced. In April 2021, the PBOC, the NDRC and the CSRC jointly released the Green Bond Endorsed Projects Catalogue (2021 Edition), which for the first time have uniformed the definition standards for green projects and promoted the integration of China's green bond market with international standards. In 2021, the National Association of Financial Market Institutional Investors launched a variety of innovative green bonds such as “carbon neutral bonds”, “green bonds for rural revitalization” and “sustainability-linked bonds”. In 2022, the interbank market successively launched “rural revitalization notes”, “scientific and technological innovation notes” and “frequent issuer program (FIP)”. In May 2022, the Shanghai and Shenzhen Stock Exchanges issued and implemented the No. 6 Guidelines for Innovative Variety Business of Corporate Bonds - Scientific and Technological Innovation Corporate Bonds, launching “scientific and technological innovation corporate bonds” on the basis of the existing innovation bond, supporting four types of issuers: scientific and technological innovation, scientific and technological innovation upgrading, scientific and technological innovation investment and scientific and technological innovation incubation.
在债券产品方面,公司信用类债券市场债券监管规则进一步完善,相关产品推陈出新。人民银行、国家发改委和中国证监会于2021年4月联合发布《绿色债券支持项目目录(2021年版)》,首次统一了对绿色项目的界定标准,推动中国绿色债券市场同国际接轨。交易商协会2021年先后推出“碳中和债”“乡村振兴绿色债券”“可持续发展挂钩债券”等绿色债券创新品种。银行间市场2022年度先后推出“乡村振兴票据”“科创票据”及“常发行计划”(FIP)。沪深交易所于2022年5月发布实施《科技创新公司债券业务指引第6号——科技创新公司债券》,在原创新债券品种基础上推出“科技创新公司债券”,支持科创企业类、科创升级类、科创投资类和科创孵化类四类发行人发行科技创新公司债券。