Shanghai and Shenzhen Stock Exchange REITs Expansion Rules Released and Implemented_Securities Times

Today, the Shanghai and Shenzhen Stock Exchanges officially released the “Guidelines for the Public Offering of Infrastructure Securities Investment Funds No. 3 – Newly Purchased Infrastructure Projects (Trial)” (hereinafter referred to as the “Expansion Rules”). This is the implementation of the decisions and deployments of the CPC Central Committee and the State Council and the deployment requirements of the China Securities Regulatory Commission, deepening the structural reform of the financial supply side, expanding equity financing channels, innovating infrastructure investment and financing mechanisms, promoting the healthy development of the infrastructure REITs market, and increasing capital. An important measure of the market’s ability to serve the real economy.

The expansion rules have been open to the public for comments from April 15 to April 30, 2022. In this official release and implementation, the expansion rules regulate and guide key issues such as newly purchased infrastructure projects during the existence of the infrastructure fund, the entire process of newly purchased infrastructure projects, and expansion and sales. The first is to clarify the conditions for newly purchased infrastructure projects, make principled requirements for application conditions, and make specific provisions for infrastructure funds, major participating institutions, infrastructure projects, and funding sources. The second is to clarify the procedural arrangements for newly purchased infrastructure projects, standardize due diligence and related transactions, and clearly refer to the initial offering standards and requirements to review applications for changes in fund products and infrastructure asset-backed securities. The third is to clarify information disclosure management, standardize the confidentiality responsibilities of participating institutions, and adhere to the principles of prudent trading suspension and phased disclosure of transactions. The fourth is to clarify the relevant arrangements for the expansion of the offering. The expansion of infrastructure funds can adopt three offering methods: placement to the original holder, public expansion and targeted expansion, and specifies the conditions and requirements that each offering method should meet.

In the next step, the Shanghai and Shenzhen Stock Exchanges will make every effort to ensure the stable and orderly landing of mature expansion projects, open up the entire business process of infrastructure REITs, form a demonstration effect, and better serve the national strategy and the overall economic and social development. (Zhu Kai and Wu Shaolong)