Chinese authorities have unified the rules on information disclosure concerning all aspects of a company's corporate credit bonds, with the aim of better protecting investors.

On Monday, the People's Bank of China (PBOC), the National Development and Reform Commission and the China Securities Regulatory Commission jointly published the rules, which will take effect on May 1, 2021. 

In China, companies can issue corporate credit bonds, which include non-financial enterprise debt financing instruments, corporate bonds and enterprise bonds, in the inter-bank market and exchanges. Until now, there were no unified rules for the three types of bonds regarding information disclosure. 

Some Chinese enterprises have reported corporate bond defaults this year due to COVID-induced slump in revenue and alterations in domestic and external economic environment. For example, the AAA-grade bond defaults of China's state-owned Yongmei Group and Brilliance Auto Group have caught public attention and dampened market confidence.

Based on the practice of the domestic market and drawing on international experience, the new rules unify the requirements regarding information disclosure on issues such as essential documents, contents, timing and frequency, according to a statement posted on the website of the PBOC, the central bank. 

The rules also make detailed requirements on the contents, structure and formats of bond prospectuses and periodic reports. 

The PBOC said these more exact requirements for formulating bond prospectuses will prevent companies from copying templates and simplifying the necessary contents, as well as clarifying rights and responsibilities and helping to protect investors' rights and interests. 

Chen Yulu, deputy governor of the PBOC, said on December 25 that China will be highly vigilant against disclosures of false information and other illegal behaviors of those defaulters, which damage the social environment and destroy the credibility of the financial market.

The PBOC will work with other departments to enhance the construction of the rule of law and the requirement of information disclosure in the bond market, improve the credit rating system and crack down on illegal acts, Chen said.

The total bond issuance in China stood at 4.7 trillion yuan (about $720.5 billion) in November, including 1 trillion yuan (about $153.3 billion) of corporate credit bonds, according to data from the central bank. 

(With input from Xinhua)