SHANGHAI, Aug 28: China’s top economic planner will delegate the right to approve most corporate bond issues to its provincial offices, the official China Securities Journal reported on Wednesday, as Beijing moves to streamline and upgrade the debt market.
Previously, all applications had to be approved by the central National Development and Reform Commission (NDRC) office, causing wide complaints about delays and inefficiency.
Local NDRC offices must now decide on applications to issue bonds within 15 days, with exceptions for requests from firms in industries under government restrictions, the newspaper said, citing a recent document issued by the commission.
Regulation of the growing bond market is complex and administrated by bureaucracies with overlapping mandates.
The NDRC is responsible for applications from non-listed and non-financial firms to issue ‘corporate bonds’, while the China Securities Regulatory Commission (CSRC) retains the authority to approve ‘company bonds’ issued by listed companies.
The People’s Bank of China (PBOC) manages the ‘financing bills’ market, with common tenors ranging between less than one year to seven years.
Given the relatively easier registration system for the financial bill system, the net value of issues there has overtaken bond issues approved by the NDRC and the CSRC.
Firms issued 2.26 trillion yuan ($369 billion) in PBOC financing bills in 2012, compared with 800 billion yuan of corporate bonds and 255 billion yuan in company bonds, according to PBOC data.
The bond market had 26.56 trillion yuan in outstanding debt at the end of 2012, up 16.75 percent from a year earlier, the data shows. ($1 = 6.12 Yuan) (AGENCIES)
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