Rules on China Infrastructure REITs Published
ISSUING AUTHORITY:
China Securities Regulatory Commission
DATE OF ISSUANCE
EFFECTIVE DATE:
August 6, 2020
The China Securities Regulatory Commission (CSRC) issued the Guidance on Public Offerings of Infrastructure Securities Investment Funds (Trial) (“Guidance”) on August 6, 2020, setting out the rules on publicly listed infrastructure real estate investment trusts (China REITs). The Guidance came into effect on the same day. The Shanghai Securities Exchange and Shenzhen Securities Exchange then issued subsequent draft rules for comments on September 4, 2020.
The infrastructure funds adopt the structure of "publicly offered funds + infrastructure-asset-backed securities". The fund manager and the manager of the infrastructure-asset-backed securities shall have actual controlling relationship between them or are controlled by the same controller. The funds shall also satisfy certain requirements; for example, 80% or more of the fund asset shall be invested in the infrastructure-asset-backed securities, holding all shares of such securities and all of the equity of the infrastructure project companies shall be held by the fund through such securities.
The infrastructure-asset-backed securities are negotiable securities issued to investors, representing shares of infrastructure properties or property rights and interests with cash flow generated by infrastructure projects as the source of payment. Such infrastructure shall include transportation facilities such as storage and logistics and toll highways, municipal utilities such as water, gas and electricity, and other infrastructure including industrial parks and pollution treatment, but not including residential and commercial real estate.
The Guidance strengthens professional competence requirements for fund managers and custodians, as well as quality requirements for infrastructure projects. It specifies the pricing method and arrangements for offering, providing that upon registration of the fund with the CSRC, the subscription price of fund units shall be determined by way of offline pricing inquiry. The Guidance also emphasizes the regulation of fund investment operation, project management and information disclosure.
Reference:
上海证券交易所公开募集基础设施证券投资基金（REITs）业务办法（试行）（征求意见稿）等
《深圳证券交易所公开募集基础设施证券投资基金业务办法（试行）》（征求意见稿）等
