SZSE Solicits Public Opinions on ABS Business Rules

To further support and standardize the development of the asset-backed securities business and protect investors' legitimate rights and interests, SZSE has, according to the overall plan of CSRC and based on current business rules such as the Guidelines for Asset Securitization Business (Revised in 2014) and the business development situation, formed the Rules of Shenzhen Stock Exchange for Asset-backed Securities Business (hereinafter referred to as the ABS Business Rules), and is currently soliciting public opinions, which is set to end on 9 December 2022.

The ABS Business Rules is basic business rules on asset-backed securities. It has laid down comprehensive and systematic provisions on the confirmation of listing conditions, issuance, listing and duration management of ABS. Its main content includes the following. First, it has provided clear ABS listing requirements, including listing conditions and their confirmation procedures and the basic requirements on underlying assets and important participants. Second, it has improved the ABS duration management mechanism. It has comprehensively refined ABS issuance and listing procedures, investor suitability, transfer mechanism, information disclosure methods, trading suspension and resumption, and delisting. Meanwhile, it has strengthened the regulation of key procedures and urged market entities to fully fulfill their responsibilities. Third, it has intensified risk control. By setting the special section of "ABS-holders' rights protection", it has stressed the requirements of authenticity, legality, validity and independence on underlying assets, made clear that important business participants have credit risk management responsibility, standardized relevant mechanism of ABS-holders' meetings, and strengthened the investor protection mechanism, in order to protect investors' legitimate rights and interests. Moreover, the ABS Business Rules has listed the specific types of the daily regulation measures, self-discipline regulation measures or disciplinary punishment that SZSE might take on the targets of regulation, to enhance the constraint and punishment of violations.

Formulating the ABS Business Rules is an important measure of SZSE to further optimize the institutional supply of the exchange-traded bond market on the basis of summing up prior regulatory service experiences. Since the filing system of corporate ABS was implemented in 2014, SZSE has continuously refined ABS rules and mechanisms, enriched the types of underlying assets of ABS, and promoted the asset securitization market to achieve positive results in making better use of existing assets and serving the high-quality development of the real economy. So far, the issuing volume of the SZSE-listed ABS has amounted to more than CNY 2 trillion, with a complete range of types of major underlying assets. ABS has become an important instrument for enterprises to expand direct financing channels and optimize financial structures and for investors to allocate assets.

Next, SZSE will earnestly implement the important requirements of the 20th CPC National Congress such as "improving capital market functions and increasing the proportion of direct financing". We will firmly serve the real economy and national strategies, continue to practice the policy of "system building, non-intervention, and zero tolerance", and follow the principle of being market- and law-based. We will further refine the ABS Business Rules and relevant supporting regulations based on market feedback and realize "simplicity, efficiency, standardability and transparency". We will gradually build an ABS business rules system that takes business rules at its core, business guidelines as its main body and business guides as its supplements and will continuously optimize the product system, to promote the standard and healthy development of the exchange-traded asset securitization market.