Revised Guidelines for the Negative List on the Undertaking of Non-Publicly Offered Corporate Bond Projects
· Document Number：No. 102  of the Securities Association of China
· Area of Law： Securities
· Level of Authority： Industry Regulations
· Date issued：05-11-2018
· Effective Date：05-11-2018
· Issuing Authority： Securities Association of China
· Status： Effective
Notice of the Securities Association of China on Issuing the Revised Guidelines for the Negative List on the Undertaking of Non-Publicly Offered Corporate Bond Projects
(No. 102  of the Securities Association of China)
All entity members:
For the purposes of further preventing risks in the non-public offering of corporate bonds, on the basis of extensive solicitation of opinions from the industries and regulatory departments, the China Securities Regulatory Commission (“CSRC”) has revised the Guidelines for the Negative List on the Undertaking of Non-Publicly Offered Corporate Bond Projects, which have been voted through at the 7th meeting of the Sixth Council of the Securities Association of China, are hereby issued, and shall come into force on the date of issuance.
Annex: Guidelines for the Negative List on the Undertaking of Non-Publicly Offered Corporate Bond Projects (2018 Revision)
Securities Association of China
May 11, 2018
Guidelines for the Negative List on the Undertaking of Non-Publicly Offered Corporate Bond Projects (2018 Revision)
Article 1 For the purposes of effectively conducting the risk control and management of the underwriting of non-publicly offered corporate bonds, these Guidelines are developed in accordance with the Measures for the Administration of the Offering and Trading of Corporate Bonds and other relevant laws and regulations and self-disciplinary rules.
Article 2 The negative list management shall be implemented for the undertaking of non-publicly offered corporate bond projects. Underwriting institutions shall not undertake the project within the scope restricted by the negative list.
Article 3 The Securities Association of China (hereinafter referred to as the “SAC”) shall be responsible for organizing the research on, determining, and issuing the negative list on the website of the SAC.
Article 4 The SAC may invite relevant competent departments, stock exchanges, securities companies and other industry experts to form a negative list assessment expert team to conduct an assessment of the negative list at least once half a year, and may conduct assessment from time to time as required for business development and supervision.
Article 5 The SAC may organize the negative list assessment expert team to discuss and study the negative list, decide to adjust the program, and submit it to the CSRC for recordation.
Article 6 Where a subsidiary of which any indicator of the audited total assets, net assets or business income in the last year accounts for more than 30% of the relevant indicators in the consolidated statements falls under any circumstance prescribed in Article (1) throughout Article (7) and Article (11) of the negative list, it is deemed that the issuer falls under the category of the negative list.
Article 7 These Guidelines shall be subject to interpretation and revision by the SAC, and shall come into force on the date of issuance.
Negative List on the Undertaking of Non-Publicly Offered Corporate Bond Projects
I. An issuer falling under any of the following circumstances
(1) There is any false record in the company's financial accounting documents in the last 24 months, or the company has any other serious violation of law.
(2) The offered corporate bond or any other debt has any breach of contract or the delayed payment of principal and interest, which still continues.
(3) The external guarantee is provided in violation of regulation or funds are occupied by an affiliate or a third party by means of loaning, compensatory repayment, advance payment or any other way in violation of regulation, which still continues.
(4) It has been taken against any administrative regulatory measure by the CSRC due to the violation of the provisions on corporate bonds in the last 12 months, or it has been given disciplinary sanctions by the stock exchange or any other self-disciplinary organization due to any violation of the provisions on corporate bonds within the last six months.
(5) The certified public accountant has issued an audit report with a qualified opinion and non-eliminated significant impact of the matters involved in the qualified opinion or an audit report with an adverse opinion or a disclaimer of opinions on the financial statements in the last two years.
(6) It is determined by the competent department as the dishonest person subject to enforcement, a dishonest production and operation entity, or any other dishonest entity, and has been suspended or restricted from offering corporate bonds due to any serious violation of law or dishonest act.
(7) It changes the use of funds raised through the previous offering of corporate bonds without approval and fails to take corrective action.
(8) The use of funds raised through the offering violates any relevant law or regulation or the investment of raised funds fails to comply with the industry policies of the state.
(9) Except financial enterprises, the funds raised from the offering of bonds are used for making financial investment such as holding financial assets for the purpose of trading, entrusted wealth management, or a bond is offered this time to raise funds so as to directly or indirectly invest in a company which takes the sale of negotiable securities as its major business.
(10) There is any false records, misleading statements or material omissions in the offering documents.
(11) It falls under any circumstance which seriously damages investors' lawful rights and interests and public interest.
II. Issuers of the following particular industries or types
(12) Local financing platform companies. For the purposes of this Article, “local financing platform companies” means economic entities which are formed by local governments, their departments and institutions, among others, through financial appropriation or injection of land, equity and other assets in accordance with the provisions of relevant documents of the State Council, assume the financing functions of government investment projects, and have the independent legal person status.
(13) The real estate companies determined by the Ministry of Land and Resources and other departments as having any violation of law or regulation such as “idle land,” “land speculation,” “hoarding properties” and “driving up housing prices”.
(15) A guarantee company which fails to meet all the following conditions at the same time:
(a) It has conducted the financing guarantee business for three years or more.
(b) Its registered capital is not less than 600 million yuan.
(c) Its subject credit rating is AA or above.
(d) It has no serious violation of law or regulation in the last three years.
(16) A small loan company which fails to meet the following conditions at the same time:
(a) It has been formed or granted recordation with the approval of the provincial competent department and it has been formed for two years or more.
(b) Its provincial regulatory rating or assessment rating has reached the highest level consecutively in the last two years.
(c) Its subject credit rating reaches AA or above.