China's stock exchanges tighten supervision on booming asset-backed securities market

The Shanghai and Shenzhen stock exchanges stepped regulatory measures on the booming asset-backed securities (ABS) market by outlining new rules that require prompt information disclosure and risk management updates from issuers, Reuters reports on Monday.

Key Highlights:

According to consultancy China Securities Analytics, “China’s ABS market has exploded over the past few years as the government’s crackdown on shadow banking pushed borrowers to alternative sources of finance. Issuance of ABS jumped to 1.5 trillion Yuan ($236.84 billion) last year, from almost zero in 2013.”

The exchanges stipulate “timely and effective disclosure” on ABS products, on which better-informed investment decisions can be made.