SHANGHAI, March 1 (Reuters) - China has launched a registration-based system for bond sales, regulators said on Sunday, scrapping an approval mechanism, in a reform that allows companies to raise funds more easily.
“China’s corporate bond market has entered a new era,” the Shanghai Stock Exchange said in a statement on the day a revised securities law took effect to scrap a legal hurdle in the path of the new system.
Companies seeking public sales of corporate bonds only need to send applications to the China Securities Regulatory Commission (CSRC) to register, the stock exchanges in Shanghai and Shenzhen said in separate statements.
Earlier, such registration required CSRC approval. The exchanges will vet the corporate bond sales electronically to ensure they meet the rules.
Sales of enterprise bonds would also adopt the registration-based system, said the powerful state planner, the National Development and Reform Commission (NDRC).
Enterprise bonds, issued mainly by state-owned companies and government-backed entities, no longer need the approval of local governments and need only register with the NDRC.
China piloted the registration-based system for initial public offerings in its Nasdaq-style STAR Market last year, and has vowed similar reforms in other parts of the stock market.
It is also looking to ease financing rules for companies in its bid to bolster an economy hit hard by the coronavirus outbreak, and is spurring firms to issue so-called “virus bonds” to help fight the epidemic or tackle its effects. (Reporting by Samuel Shen and David Stanway; Editing by Clarence Fernandez)