China implements registration-based enterprise bond issuance

China started to transform the enterprise bond issuance to a registration-based system from an approval-based one from March 1, according to a notice on the website of the National Development and Reform Commission (NDRC).

The NDRC shall register the issuance of enterprise bonds in accordance with the law, said the notice.

It clarified the requirement for issuing enterprise bonds, including the average distributable profits over the latest three years being sufficient to pay one-year interest. It encouraged the funds raised to invest in projects that conform to the macro-control policies and industrial policies.

The NDRC also stressed higher requirements for information disclosure under the registration-based system and more responsibilities of intermediaries.

China's revised Securities Law went into effect on March 1, a milestone in the country's capital market reform. The new law outlines regulation details in securities issuance and trading, the takeover of listed companies, information disclosure and investor protection, among others.