On May 27, 2015, a conference on bond financing of small- and medium-sized enterprises and related investor protection mechanism was held at the Beijing head office of Dacheng. The conference is a technical assistance program started by Asian Development Bank (ADB), at the invitation of Bond Regulation Department of China Securities Regulatory Commission (CSRC). Due to Dacheng’s wealth of experience in advising small- and medium-sized enterprises on bond financing transactions, ADB and CSRC contacted Shanghai-based attorney Zhang Xinming and collectively organized the event.  

The conference was hosted by attorney Zhang Gang, member of Dacheng’s Specialized Committee of Bond Instruments. Beijing-based senior partner Li Yunli and Shanghai-based partners Fu Qing and Zhang Xinming discussed with Stephen Wells, Kerry Adby, and Seung Min Lee, experts from ADB, Ms. Rui Ying, researcher from CSRC, Professor Xu Xiaoping from Shanghai University of Finance and Economics, Ms. Zheng Xin from the Fixed Income Department of Shenzhen Stock Exchange, Ms. Tang Jing, senior research assistant at Beijing Institute of Securities and Futures, on issues such as the status quo of China’s bond market, the co-existing review and approval systems, and underlying problems in bond financing by small- and medium-sized enterprises. 

Participants from ADB were particularly interested in several questions, such as what rules and mechanism China would follow in case of default following bond issuances and the role guarantee institutions would play in this process and existing problems, and sought answers from attorneys of Dacheng. The attorneys answered these questions and used cases they had represented to illustrate their points. 

Participants also discussed about how to regulate China’s bond market to guarantee its sound development. In consideration of the present situation and disadvantages of having lead underwriters act as trustee in the bond market, Ms. Rui Ying, a research from CSRC, pointed out that CSRC was currently researching on the feasibility of letting law firms or lawyers act as trustee. She consulted the particating attorneys’ opinion and the attorneys unanimously said they would like to try. 

The conference was well-received by participants from ADB and CSRC. They thanked Dacheng for the organization efforts and active participation in the conference. All parties were expecting further contact and communication in the future.