Research On The Relief Method Of Bond Default

In recent years,China’s bond default incidents have occurred frequently,and the bond default rate and default amount have shown an upward trend.Since the occurrence of the 11 Chaori Bond’s material default,the rigid payment model for default protection has been broken.The subject,industry scope,and scale involved in bond defaults have continued to expand,and the era of normalization of defaults is coming.Bonds are essentially a debt-to-debt relationship.Bond holders can require the issuer to perform debts based on the prospectus.However,bonds also have commercial attributes,and are subject to the inevitability of default due to the issuer’s internal decision-making or external operating environment factors.Bondholders have obvious diversification characteristics and are in a weak position compared to issuers.In order to protect holders and prevent systemic financial risks,it is necessary to strengthen the research on remedies for bond defaults.Bond default is a dynamic process.The risk of default may be exposed before the issuer declares that the principal and interest cannot be fully or partly redeemed.The logic of the writing is from the relief model based on collective action and relief based on public relief.The model is developed to study the current situation,deficiencies and countermeasures of bond default relief.At present,the methods that China can adopt to bond defaults mainly include the collective actions of the bondholders’ meeting system and the trustee system,as well as judicial relief.China is currently presenting a diverse bond market.The inconsistency of the bond market makes the issuance,custody and settlement,and investor protection clauses inconsistent,which will affect the efficiency of default relief.Regarding the bondholders’ meeting and the trustee system,although new documents have been issued in the past two years to make up for many loopholes in the past,the protection of bondholders opposed to the bondholders,the external effectiveness of the bondholders’ meeting,and the trust relationship between the trustees Structure and conflict of interest still affect the efficiency of collective action.Judicial relief measures mainly include litigation and bankruptcy.Although bankruptcy proceedings can also be initiated,the Corporate Bankruptcy Law has no special provisions for bond defaults and the rate of compensation is not high.In the case of a bond breaching contract due to misrepresentation,a tort legal relationship will arise.Bond inte rmediaries need to bear civil compensation liabilities for actively or passively committing false statements.However,in Wuyang Bond,the court’s judgment on the responsibility of some intermediaries is unclear.It is deemed wrong.The promulgation of the "Minutes of the National Forum on Bond Disputes Trial by Courts" provides many detailed rules for bond trials,but it is not a judicial interpretation that cannot be invoked in the judgment.The relevant rules for bond misrepresentation still apply to the judicial interpretation more than ten years ago.Hysteresis.The existence of the above-mentioned problems affects the efficiency of the holder’s relief.For this reason,based on China’s national conditions and drawing on foreign legislation and justice,we should make up for the shortcomings of the above-mentioned relief measures.Regarding the issue of regulatory mechanisms,it is necessary to explore a coordinated regulatory mechanism,not to directly require the unification of the entire bond market and regulatory bodies,but to start from aspects such as the unification of the regulatory legal system and infrastructure connectivity,and promote the unification of supervision at the micro level.In collective actions,strengthen the protection of dissenting bondholders,build a trustee system based on trust relationships,and attach importance to the prevention and resolution of conflicts of interest.At the level of judicial relief,it is first necessary to increase the intensity of the rule of law and give full play to the role of active justice.Secondly,considering the stakeholder and decentralized nature of bonds,which are different from ordinary creditors,it is necessary to provide for the handling of bond defaults in the Corporate Bankruptcy Law,and at the same time improve the bond transfer mechanism during bankruptcy reorganization for those who want to withdraw.Provide space for bondholders and new investors who want to enter.Finally,improve the effectiveness of bond dispute resolution rules for better applicat ion,and at the same time accurately grasp the responsibility of intermediary a gencies in judicial practice,instead of forcibly dragging all intermediary agencies into the water in order to maximize the protection of investors’ interests.Bond financing is one of the effective means to resolve the financing difficulties of China’s current capital market.It can provide a lower-risk source of funds for both investment and financing.Therefore,the effectiveness of relief for bond investors is of great importance to the bond market and the entire society.Impact.The financial market has risk characteristics such as uncertainty and complexity.The normal development of bond defaults is the only way for the market to mature.China is currently in an important transitional period.Dealing with bond defaults through the above diversified remedies is a constr uction Market-oriented and legalized solutions for bond default disputes.