Recently, the China Securities Regulatory Commission (CSRC) decided to expand the range of the pilot for short-term corporate bonds business of securities companies to all securities companies, and allow securities companies to carry out the business of securitizing income right of assets of margin trading and securities lending, so as to further expand the financing channels for securities companies to support their steady business development.
To support the expansion of financing channels for securities companies, the Shanghai Stock Exchange (SSE) has actively taken measures to promote the implementation of the above-mentioned two businesses. On the one hand, the SSE has effectively promoted the development of the business of short-term corporate bonds of securities companies. Since the CSRC released the notice on pilot of 20 securities companies issuing short-term corporate bonds last year, the SSE has vigorously promoted consultation, guidance, filing, listing, transfer and other work in the business, and will include the short-term corporate bonds in the management of business of non-public issuance of corporate bonds in the near future, continuously providing securities companies with short-term financing services. So far, a total of 13 securities companies, including China Securities Finance Corporation Limited, have applied to the SSE for the issuance of short-term corporate bonds, with up to RMB146.4 billion filed. Specifically, the issuance of 27 short-term corporate bond products has been completed, with the total issuance amount of RMB91.4 billion and the weighted average interest rate at 5.35 %.
Since the range of the pilot was expanded to all securities companies, the securities companies have been responding in an active manner, and many of them have contacted the SSE for information related to the procedures of the business. Expressing vigorous support for the expansion of the business pilot, the SSE will improve the efficiency in managing and handling the project applications. For the projects with complete materials, the SSE will designate special responsible persons and issue a no-objection letter on listing and transfer in five working days, so as to energetically promote the all-around development of the business for short-term corporate bonds of securities companies.
On the other hand, the SSE has spared no effort in promoting the implementation of the business for securitizing the assets of margin trading and securities lending. In recent years, the securities companies have seen the market size of the business for margin trading and securities lending grow rapidly. By the end of June this year, the financing balance on the two stock markets in Shanghai and Shenzhen had amounted to nearly RMB2 trillion, with the financing balance of the SSE standing at RMB1.27 trillion. Overall, with well developed measures for risk control, the businesses for margin trading and securities lending belong to high-quality assets of the securities companies. The asset securitization of margin trading and securities lending refers to the asset securitization of the creditor’ right of the capital financed out in the margin trading and securities lending business of the securities companies, which will vitalize the high-quality stock assets of the securities companies, provide financing channels featuring compliance and low cost for the securities companies and promote the virtuous cycle of the margin trading and securities lending business.
Earlier, under the guidance of the CSRC, the SSE had discussed the feasibility for asset securitization of margin trading and securities lending with relevant securities companies and made a mature project program. Since the CSRC announced that the securities companies are allowed to do the asset securitization business of margin trading and securities lending, several securities companies ranking high in financing balance of margin trading and securities lending have contacted the SSE for information related to the business procedures and the key points of the program, vigorously preparing for the asset securitization project. The SSE will energetically support the securities companies in developing their asset securitization business of margin trading and securities lending, help them improve the project program, elevate the efficiency in accepting the applications for listing and transfer, and control the risks in the development of the business.