China_Bond_Market_ADB_201109.pdf

People’s Republic of China Bond Market Guide ASEAN+3 Bond Market Guide | Volume 1 | Part 2 Section 1: PRC Bond Market Guide iii Contents Acknowledgement v I. Structure, Type, and Characteristics of the Bond Market 1 A. Breakdown and Segmentation of the Market 1 B. Methods of Issuing Bonds 2 C. Credit Rating System 2 D. Related Systems for Investor Protections (Trustee System) 3 E. Listing of Bonds and Medium-Term Notes 4 F. Legal and Regulatory Framework of the Bond Market 4 G. Laws on Bonds Issuance 6 H. Self-Governing Rules of the Market 6 I. Bankruptcy Procedures 7 II. Primary and Secondary Market-Related Regulatory Frameworks 8 A. Provisions Regarding Bonds Issuance 8 B. Provisions Regarding Investors 9 C. Taxation Framework and Requirements 10 D. Regulatory Reporting Requirements 11 E. Possible Challenges and Expected Changes of Regulatory Rules 12 III. Trading of Bonds and Trading Market Infrastructure 14 A. Trading of Bonds 14 IV. Impediments/Restrictions for the Realization of a Cross-Border Inter-Regional Market 17 A. Issues Concerning Accounting Standards 17 B. Issues Concerning Information Disclosure and Investors’ Protection 18 V. Description of the Securities Settlement System 19 A. The Custody System 19 B. The Securities Settlement Infrastructures 19 C. The Bond Transaction Flows 21 ASEAN+3 Bond Market Guide | Volume 1 | Part 2 Section 1: PRC Bond Market Guideiv Figures and Tables Figures Figure 5.1 Bond Market Infrastructure Diagram 19 Figure 5.2 Bond Transaction Flow for Domestic Trades in the Over-the Counter Market/Delivery versus Payment21 Figure 5.3 Bond Transaction Flow for Domestic Trades Exchange Market/Delivery versus Payment 22 Figure 5.4 Bond Transaction Flow for Foreign Investors Exchange Market/Qualified Foreign Institutional Investors 24 Tables Table 1.1 Credit Rating Ranks for Medium- and Long-Term Bonds in China’s Inter-bank Bond Market 3 Table 1.2 Credit Rating Ranks for Short-Term Bonds in the Inter-bank Bond Ma