On August 22, 2014, two classes of 2014 Subordinated Bonds of GF Securities Co., Ltd. (1st Tranche) got listed on Shenzhen Stock Exchange (SZSE), being the first subordinated bonds of securities company that adopt record-filling-after-issuance system listed on SZSE. In the light of The Decision of the State Council on Cancellation and Decentralization of the Administrative Approval on a Batch of Projects (No.5 [2014] File Released by the State Council), and the announcement released by China Securities Regulatory Commission(CSRC) on February 21, 2014 (No.10 [2014] Announcement Released by CSRC), the administrative approval on the subordinated bonds of securities companies have been cancelled, which bring about more flexible and convenient subordinated bonds to loan to the securities companies. Against such backdrop, GF Securities issued the 1st tranche subordinated bonds of 6 billion Yuan on July 24, 2014. The bonds are categorized into two classes, of which, the 1st class is 4 (2+2) years in duration, 3 billion Yuan in scale, and with 5.7% coupon rate, while the 2nd class is 5(3+2) years in duration, 3 billion Yuan in scale, and with 5.9% coupon rate. In terms of coupon rate, 2014 Subordinated Bond of GF Securities Co., Ltd. have similar coupon rate as those of the public corporate bonds issued by securities companies of the same level over the same period, but have evident advantage over the subordinated bonds of the same level issued in the first quarter of the year.
After the cancellation of administrative approval, securities company issuer of subordinated bonds may issue the bonds according to the market situation without acquiring the administrative approval from the CSRC in advance. The issuer may apply to the exchange for bonds’ codes, and enquire the coupon rate before issuance. They should file the record to the local securities regulatory bureau after the issuance, and after undergoing the registration formalities in the securities registration & clearing companies, they may submit relevant documents to the exchange to apply for the listing of the bonds. The cancellation of administrative approval enables the issuer to choose the best time for issuing bonds, consequently, the coupon rate enquiry becomes more flexible and the market operation efficiency is enhanced.