Recently, Shanghai Clearing House (SHCH) Yulan Issuance Model has been officially expanded to support Free of Payment (FOP) distribution, enabling issuers to flexibly choose between DVP and FOP distribution models during the bond issuance process. It marks a step forward for Yulan Issuance Model in terms of business arrangement.
This optimisation is the latest initiative by SHCH, in collaboration with Euroclear, to actively respond to market demands and jointly promote Yulan Issuance Model so that it better meets the financing needs of various entities, accommodates diversified distribution pathways, and enhances the convenience of issuance and distribution. At the end of 2020, under the guidance of People’s Bank of China (PBOC), SHCH launched Yulan Issuance Model. With SHCH acting as the central registrar and CSD, the model establishes an independent and controllable, safe and efficient new channel for bond issuance in the offshore market through cross-border connectivity with overseas infrastructures such as Euroclear, whilst simultaneously introducing information see-through arrangement. Since the launch of Yulan Issuance Model, SHCH has remained focused on its long-term vision of becoming the central custodian for offshore RMB bond assets. By mobilising market collaboration, SHCH has driven the steady expansion of Yulan issuance model, successively achieving a series of mechanism optimisations, including full coverage of denomination currencies, the implementation of tax-exemption policies for issuers, support for corporate actions involving put options, and network connectivity for international listing platforms.
In the future, SHCH will closely align with market needs, continue to deepen business and mechanism innovation, continuously optimise services across the entire issuance process, and steadily expand the depth and breadth of the market. Working hand in hand with all market participants, SHCH will further refine the service system and ecosystem of the Yulan Issuance Model to facilitate its high-quality development, and contribute to the enhancement of Shanghai’s status as an international financial center, expansion of offshore RMB bond market and the injection of new momentum into the development of overseas RMB asset pool.
