The China Securities Regulatory Commission ("CSRC") recently formulated and issued the Administrative Measures for Convertible Corporate Bonds (the "Measures"), with effect from January 31, 2021.

The Measures, consisting of 23 articles, cover the content including transaction transfer, information disclosure, share conversion, redemption, resale, entrusted management, regulatory punishment, and rules connection. Among others, the Measures require that within the duration of convertible bonds, an issuer shall continuously pay attention to whether the redemption conditions are met; if the redemption conditions are expected to be met, it should promptly disclose them and fully alert the market to the risks five trading days before the redemption conditions are met. Meanwhile, the Measures have perfected the scope of temporarily disclosed events, mainly including seven types of circumstances such as the adjustment or amendment to the conversion price, the cumulative shares converted reaching 10% of the company's shares, and the total amount of shares not converted being less than CNY30 million. The Measures also propose establishing an entrusted management system for convertible bonds and clarify that the trustee of convertible bonds shall perform the duties of entrusted management in accordance with the Administrative Measures for the Issuance and Trading of Corporate Bonds and the agreement on the entrusted management of convertible bonds.

(Source: China Securities Regulatory Commission)