On May 17, China Securities Regulatory Commission (“CSRC”) officially approved the registration of four publicly offered infrastructure REITs on SZSE. It marks another important step in the pilot work of the first publicly offered infrastructure REITs on the market, which will enter the public offering stage.

SZSE’s first four publicly offered infrastructure REITs cover mainstream infrastructure types

The first four publicly offered infrastructure REITs on SZSE are AVIC Shougang Biomass Closed-end Infrastructure Securities Investment Fund, Bosera CMSK Industrial Park Closed-end Infrastructure Securities Investment Fund, Ping An Guangzhou Communications Investment Guangzhou-Heyuan Expressway Closed-end Infrastructure Securities Investment Fund, and Hotland Innovation Yantian Port Warehousing Logistics Closed-end Infrastructure Securities Investment Fund. They are expected to raise nearly CNY 14 billion.

All of the first infrastructure projects are located in the key regions for integrated development, namely, the Beijing-Tianjin-Hebei Region and the Guangdong-Hongkong-Macao Greater Bay Area. The projects cover mainstream infrastructure fields like garbage disposal and biomass power generation, industrial parks, toll roads and warehousing logistics. Original equity holders will recover funds and invest in fields that strengthen incremental business and improve areas of weakness. The four REITs are an important measure of the capital market to actively serve national strategies and the development of the real economy.

SZSE strengthens regulatory service and technological support to advance the pilot project of publicly offered REITs in a steady and orderly manner

Since the launch of the pilot project of publicly offered REITs, SZSE has, with the guidance and support of the National Development and Reform Commission and other relevant ministries, steadily advanced relevant work according to the unified plan of CSRC. First, strengthening the institutional foundation. SZSE has issued a system of rules including business measures, guidelines on focuses of review, and guidelines for offering, formulated the listing and offering guide, and standardized important nodes and key links in the business process. Second, enhancing technical guarantee. SZSE has completed upgrading of listing and trading related technologies, launched the online review system for publicly offered REITs, an information disclosure website and an offline offering system after several rounds of testing, with the whole review process electronized, and business information public and transparent. Third, doing a good job serving the market. SZSE has organized practical seminars, held the Greater Bay Area publicly offered infrastructure REITs development forum, and rolled out series investor education products such as “Click to Understand Publicly Offered REITs” to popularize and interpret the rules. Fourth, intensifying project reserve. By strengthening connection to local competent agencies at all levels, market buyers and sellers, and intermediaries, SZSE has reserved a batch of quality projects in the fields of logistics & warehousing, transportation, industrial parks, wastewater treatment & garbage disposal, data center and energy power generation. Fifth, improving review quality. SZSE adheres to the working philosophy of being open-minded, transparent, honest and impartial. With information disclosure at the core, SZSE has refined the review quality control mechanism to improve the quality and efficiency of project review, with a focus on the compliance of participating institutions, project quality and trading structure, the reasonableness of asset appraisal, cash flow forecast and fund operation management arrangements, and the comprehensiveness of information disclosure and risk warning. On May 14, SZSE reviewed and approved the first four publicly offered infrastructure REITs projects.

Next, SZSE will refine book building and issuance procedures according to relevant process requirements and the characteristics of publicly offered infrastructure REITs. Fund managers negotiate with offline investors via the exclusive electronic platform for offline offering of REITs, and determine the subscription price of infrastructure fund shares. Strategic investors, offline investors and public investors will subscribe for the fund with the price determined through book building. In this way, SZSE will ensure the fund offering is steady and orderly.

SZSE works with market participants based on consensus on reform and development to promote sustained development of the publicly offered REITs market

The pilot project of publicly offered infrastructure REITs is an effective policy instrument adopted by the capital market to implement the decisions and plans of the CPC Central Committee and the State Council on preventing risks, deleveraging, stabilizing investment and improving areas of weakness. Featured by excellent liquidity, relatively stable return and strong safety, it is of great significance to putting existing social assets to better use, reducing macro leverage ratio, improving the development quality and effectiveness of the infrastructure industry, and enriching investment and financing types on the capital market.

SZSE will earnestly practice the principles of “system building, non-intervention, and zero tolerance”, apply the working philosophy of being open-minded, transparent, honest and impartial, and follow the plans and requirements of CSRC and the market- and law-based direction. We will form a synergy with market participants to steadily advance the book building, offering, listing and duration regulation of the first publicly offered infrastructure REITs. We will do a good job in supporting and serving fund managers, to ensure the products are listed smoothly as soon as possible. We will give better play to our leading role and market hub to ensure a good start of the pilot project and promote standard and healthy development of infrastructure investment and financing. We will strive to build publicly offered REITs into a mainstream financial product on the Chinese capital market so as to better serve national strategies and economic and social development.