The Improvement Of Exchangeable Bonds System In China

On June 17 th, 2014, exchangeable bonds have finally entered the public offering stage, which has lasted six years in the past in China. Exchangeable bonds as a new financial instrument has it’s own advantages endowed by nature, has a very important significance to expand the financing channels for the shareholders of the listed companies and perfect China’s bond market. But from the reaction of current market, the issuance of exchangeable bonds in China’s bond market is not smooth, " Trial Provisions on the Issuance of Exchangeable Corporate Bonds by Shareholders of Listed Companies"(hereinafter referred to as "Trial Provisions") has been released for three months but no one shows any interest.By the end of 2014 December only Baosteel Group Corporation issued the first exchangeable bonds for public offering in China, which causes deep consideration.In our country, the formation of exchangeable bond is mainly in order to solve the question of the sale of limit shares in split- share reform, which makes the exchangeable bonds be expected as "the buffer of market" at the beginning. But because of the high standard of issuance, the high cost, the complicated procedures and other reasons, shareholders of Listed Companies have little interest and exchangeable bonds has no measure to solve the question of the sale of limit shares. When we view the exchangeable bonds as a new financial instrument, exchangeable bonds system in our country still has some problems, one of the most fundamental problems is the imbalance of risks and benefits include the imbalance of bond holders and bond issuers.This paper tries to analyze the risks and benefits of bond holders and bond issuers in our country, investigate the demand of bond holders and bond issuers, on this basis, this paper try to reveal the shortcoming of our exchangeable bonds system and perfect it. In the course of the research, not alone in order to protect the bond issuers only or bond holders only, because a kind of legal system should measure the main interests of everyone, without prejudicing interests of other subjects, finding a interests balance between the subjects to achieve a win-win situation between the main subjects, only by doing so can we say it is a reasonable legal system, which also is this paper’s main research ideas.This paper is divided into four parts: The first part is the basic summary of the exchangeable bonds system, compared with those of related types of bonds, make the basic theory of the system into clear. Also analyses the legal nature and the value of this bonds to highlighting the important value and the significance of the system; The second part analyses the main interests of the subject of bonds and then leads to the main questions of the existing system and be prepared for the third part; The third part undertakes the second part, mainly expounds the main problems faced by the system; The fourth part is the perfection of exchangeable bonds system of our country,which in order to reduce the standard of issue,cancel the require of unlimited of shares, improve the legal of adjust the price of exchange shares, clear the regulation of guarantee and protect the right of bond holders to know the information of listed company.Through the relevant argumentation, this paper argues that: First,our exchangeable bonds system ignores the interests and needs of each subject, resulting in the unbalance between the bond holders and bond issuers,which is the main reason of our exchangeable bonds face cold in the market, we should balance the main interests and demands of each subject; Second, "Trial Provisions " abandons the principle and method of adjustment to bond issuers is not conducive to the protection of bond holders; Third, the guarantee rules in “Trial Provisions”easily leads to doubt and confusion, a establishment of a trust mode can well solve the existing problems in the rule; Fourth, the bond issuers shall bear more duty to help bond holders achieve information of the listed company, which includes acquiring information positively and negatively in two aspects,and the information bridge between the bond holders and the listed company is the bond holders meeting.