• Document Number：Shen Zheng Shang [2017] No. 573
• Area of Law： Securities
• Level of Authority： Industry Regulations
• Date issued：09-07-2017
• Effective Date：09-08-2017
• Status： Effective
• Issuing Authority： Shenzhen Stock Exchange

Notice of the Shenzhen Stock Exchange on Further Regulating and Improving Issues Related to the Issuance of Exchangeable Corporate Bonds of the Shenzhen Stock Exchange
(Shen Zheng Shang [2017] No. 573)
All the market Participants：
Recently, the China Securities Regulatory Commission announced the revised "Administrative Measures for Securities Issuance and Underwriting" (hereinafter referred to as these "Measures"). With a view to implementing the relevant provisions of these Measures and further regulating and improving the issuance business of exchangeable corporate bonds (hereinafter referred to as the "Exchangeable Bonds") of the Shenzhen Stock Exchange (hereinafter referred to as the "Exchange"), the relevant issues are hereby notified as follows:
1. Exchangeable Bonds are issued in the form of online issue, offline issue or combination of both based on different issuing objects.
2. The main underwriter shall rationally set up an online subscription limit for single accounts according to the issuing scale. The minimum number of online subscription is one lot (RMB 1,000) and the number of subscription should be one lot or an integer multiple of one lot, but the maximum shall not exceed the subscription limit specified in the issue announcement, meaning the subscription will be invalid if it exceeds the limit.
With a view to ensuring that the subscription can be orderly conducted, the Exchange may, based on the market conditions and the technical system carrying capacity, adjust the subscription unit, maximum subscription quantity and subscription time, and release them to the market.
3. Each investor may use it Shenzhen securities account to online subscribe the exchangeable bonds issued by the Exchange on T day (T day is the online subscription day determined in the issue announcement, the same below). Online subscription investors shall independently express their subscription intention, rather than fully authorize securities companies to subscribe online.
4. Each investor is not required to pay the subscription fund for online subscribing the exchangeable bonds, but needs to fulfill the obligation of capital delivery in accordance with the lot-winning result after winning the lot, to ensure that there is a sufficient amount in the capital account for subscription by the end of T+2 day. If any investor fails to have the sufficient fund for subscription, the deficiency of the description shall be deemed as having been given up, and the investor shall bear the resulting consequences and related legal responsibilities.
If any investor gives up all or part of its subscription due to insufficient fund, the settlement participants (including the securities company and the custodian, the same below) shall carefully examine and verify it, and declare it to China Securities Depository & Clearing Corporation Limited (hereinafter referred to as the "CSDC"), Shenzhen Branch before 15:00 on T+3 day. If any settlement participant misreports, fails to report or fails to promptly report, the settlement participant shall bear the resulting consequences and related legal responsibilities.
The amount of the bonds to be given up shall be determined based on the actual shortage of funds, and the smallest unit is par valued at RMB 100, and is not required to be an integer multiple of 10 sheets. The exchangeable bonds given up for subscription by the investor shall be underwritten by the lead underwriter, or handled in the way determined and disclosed by the issuer and the lead underwriter in advance.
5. Each settlement participant shall, based on the actually payable subscription fund of the exchangeable bonds that is calculated according to the lot-winning result of the exchangeable bonds and the declared data for giving up subscription, fulfill the capital delivery obligation at 16:00 on T+3 day, and use its capital delivery account (i.e. settlement reserve account) opened in China Securities Depository & Clearing Corporation Limited, Shenzhen Branch to complete the capital delivery.
If any settlement participant fails to have the sufficient fund to complete the capital delivery of the exchangeable bonds, the insufficient part is considered as invalid subscription, and the invalid subscription shall be handled in accordance with the relevant provisions of the CSDC; and the settlement participant shall bear the resulting consequences and related legal responsibilities.
6. If any investor fails to make the full payment after winning the lot for three times in the 12 consecutive months, the settlement participant is not allowed to participate in the online subscription of new shares, convertible corporate bonds and exchangeable bonds within six months from the day following the date of its latest declaration for giving up subscription (calculated based on 180 natural days, including the following day). The number of times for giving up the subscription shall be calculated together based on the new shares, convertible corporate bonds and exchangeable bonds the subscription of which has been actually given up by the investor, and handled in accordance with the relevant provisions of China Securities Depository & Clearing Corporation Limited, Shenzhen Branch.
7. The underwriter may charge the subscription deposit of not more than RMB 500,000 from offline singled investors, and specify how to handle the deposit when an investor defaults in the issue announcement.
8. With a view to facilitating the relevant market participants to handle the issuance and listing of exchangeable bonds, the Exchange formulated the Business Guidelines of the Shenzhen Stock Exchange for the Issuance and Listing of Exchangeable Corporate Bonds (hereinafter referred to as the "Guidelines"). This Notice and the Guidelines shall come into force from September 8, 2017.
This Notice is hereby given.
Shenzhen Stock Exchange
September 7, 2017