On September 18, 2014, subordinated bonds issued by Minsheng Securities and Bohai Securities will be listed on the bond trading platform of the Shanghai Stock Exchange (SSE), with the scale of securities companies’ subordinated bonds to be further enlarged. Remarkably, the subordinated bonds issued by the above two securities companies with aftermath record filing will be listed on the SSE, after subordinated bonds of Everbright Securities, the first kind of domestic subordinated bonds going through aftermath record filing at the relevant securities regulatory bureau, were listed on the SSE on June 26, 2014.
According to the “Decision of the State Council on Cancelling and Decentralizing Authority of Administrative Approval of Some Items” (Guo Fa [2014] No. 5 Document), the China Securities Regulatory Commission (CSRC) released an announcement (CSRC Announcement [2014] No. 10 Document) on February 21, 2014, in which the CSRC decided to cancel administrative approval for securities companies’ borrowing subordinated bonds. That is, securities companies should carry out aftermath record filing at the relevant securities regulatory bureau after completing issuance of subordinated bonds, and the securities regulatory bureau should give a receipt for the record filing to the applicant under the precondition of complete documents.
Aftermath record filing is conducive to enhancing efficiency of securities companies’ subordinated bonds issuance. Thanks to it, securities companies can select issuance time more independently and flexibly, lower issuance costs, and make subordinated bonds into a high-efficient and stable financing instrument for securities companies. With the more fierce competition and the expanded innovation scope seen in the securities industry over past years, securities companies put forward higher and higher requirements for capital scales. Subordinated bonds issuance contributes to replenishing net capital, elevating securities companies’ market competitiveness and anti-risk capability, and providing fund support for their business innovation.
Since release of the “Regulation on Management of Securities Companies’ Subordinated Bonds”, the SSE has successively provided listing service for subordinated bonds issued by over 20 securities companies including Guotai Junan Securities, CITIC Securities, and China Securities, with the total issuance amount up to more than RMB60 billion, which has facilitated to solve limits on securities companies’ financing and create more financing channels for them.
Since last year, the SSE has taken an array of measures to boost the innovative development of the bond market and improve the financial service. The SSE has provided one-stop service to improve efficiency of bonds registration and listing. That is, securities companies submit application documents of registration and listing to the SSE, and the SSE and Shanghai Branch of China Securities Depository and Clearing Corporation Limited will complete the work of bonds registration and listing within 5 working days. Besides, the SSE will open the business of collateralized agreed repo characterized by independent negotiation and agreed transaction of buyer and seller this year, in a bid to enhance liquidity of the secondary bond market and lower financing costs of issuers. The innovative business will provide functions of liquidity support and repo financing for publicly offered bonds and non-publicly-issued-products such as securities companies’ subordinated bonds.