Several Provisions of Pudong New Area of Shanghai Municipality on the Development of Free Trade Zone Offshore Bond Business

(Adopted at the 26th Session of the Standing Committee of the 16th Shanghai Municipal People's Congress on December 30, 2025)

Article 1

The Several Provisions of Pudong New Area on the Development of Free Trade Zone ("FTZ") Offshore Bond Business (these "Provisions") are enacted to promote the orderly and sound development of FTZ offshore bond business, give impetus to the development of Shanghai as an international financial hub, better serve the real economy, and advance high-level institutional opening-up in accordance with the basic principles of relevant laws and administrative regulations and in light of the actual circumstances of Pudong New Area.

Article 2

These Provisions shall apply to the conduct of FTZ offshore bond business and related facilitation and safeguard work within Pudong New Area.

For the purposes of these Provisions, FTZ offshore bonds mean the debt financing instruments that are issued by offshore issuers, registered and deposited through registration and depository institutions and their branches, primarily offered to offshore investors, repay principal and interest as scheduled, and are transferable.

Article 3

The Municipal People's Government shall strengthen overall leadership over the work on FTZ offshore bond business, deepen collaboration with financial regulatory departments under the State Council, enhance holistic planning and system integration of reform initiatives, support the financial regulatory departments under the State Council in formulating rules related to FTZ offshore bond business, promote business development, strengthen risk management, and coordinate the resolution of major issues arising in the development of FTZ offshore bonds.

The municipal local financial regulatory authorities and the People's Government of Pudong New Area shall, under the guidance of the financial regulatory departments under the State Council, strengthen coordination with their Shanghai-based institutions, establish mechanisms for monitoring and analyzing issuance, redemption, and information disclosure of FTZ offshore bonds, and carry out risk prevention and resolution work in accordance with their statutory duties.

Article 4

Offshore entities participating in FTZ offshore bonds shall comply with the laws and regulations of their own countries or regions, or with the requirements of relevant international treaties.

Article 5

The following entities may issue FTZ offshore bonds:

1.offshore legal persons and unincorporated organizations;

2.foreign government-related institutions or international organizations;

3.offshore subsidiaries of domestic enterprise legal persons;

4.offshore branches of domestic financial institutions; or

5.other entities approved or consented to by the financial regulatory departments under the State Council.

Issuers as specified in the preceding paragraph shall earnestly fulfill regulatory requirements for anti-money laundering, counter-terrorist financing, and anti-tax evasion.

Domestic enterprise legal persons as specified in Item (3) of the first paragraph shall comply with national macroeconomic regulation and control requirements.

Article 6

Issuers shall satisfy the following conditions:

1.possessing sound an internal governance mechanism and a comprehensive risk management system;

2.maintaining financial stability and good credit standing;

3.having sound debt repayment capability; and

4.being subject to effective supervision by the regulatory authorities of their own country or region, with major risk regulatory indicators meeting regulatory requirements of such authorities.

Article 7

The following entities may invest in FTZ offshore bonds:

1.offshore legal persons and unincorporated organizations;

2.foreign government-related institutions, international organizations, and sovereign wealth funds;

3.offshore subsidiaries of domestic enterprise legal persons;

4.offshore branches of domestic financial institutions; and

5.other entities approved or consented to by the financial regulatory authorities under the State Council.

The investment entities specified in the preceding paragraph shall earnestly fulfill regulatory requirements relating to anti-money laundering, counter-terrorist financing, and anti-tax evasion.

Article 8

Relevant entities participating in FTZ offshore bond business are encouraged, on the basis of equality, voluntariness and regulatory compliance, to participate in FTZ offshore bond business through FTZ accounts.

Article 9

Domestic and overseas banks, securities companies, trust companies, credit rating agencies, law firms, accounting firms, and other institutions are supported to participate in FTZ offshore bond-related services on the basis of equality, voluntariness, and regulatory compliance.

Article 10

In accordance with the underwriting rules for FTZ offshore bonds formulated by the financial regulatory departments under the State Council, commercial banks registered in Pudong New Area, or branches of commercial banks registered in Pudong New Area, may, upon approval or consent of the financial regulatory departments under the State Council, participate in FTZ offshore bond underwriting business.

Securities companies registered in Pudong New Area and their qualified branches may participate in FTZ offshore bond underwriting business according to law.

Article 11

Upon approval by the financial regulatory departments under the State Council, registration and depository institutions may provide services for the registration, custody, settlement, and related business of FTZ offshore bonds. Registration and depository institutions shall, in principle, adopt a single-tier custody model (a direct holding system), under which FTZ offshore bonds are recorded in accounts opened in the name of the investment entities.

Where custody of FTZ offshore bonds involves offshore entities, a multi-tier custody model (an indirect holding system) may be adopted, subject to approval by relevant departments and based on business necessity. Sub-custodian institutions shall obtain the requisite qualifications for engaging in custody business in accordance with the laws and regulations of their respective countries or regions.

Custodian institutions shall conduct settlement of FTZ offshore bonds in accordance with valid settlement instructions. Once such settlement is completed, it shall be final and irrevocable, and shall not be rescinded or altered.

Article 12

With respect to FTZ offshore bonds recorded in accounts held in the name of sub-custodian institutions, the relevant rights and interests shall be enjoyed by the investment entities according to law. Sub-custodian institutions may, on behalf of the investment entities, exercise investor rights related to FTZ offshore bonds towards the higher-tier (registration and) custodian institutions.

To perform their duties according to law, the registration and depository institutions may require sub-custodian institutions to promptly provide relevant information. Sub-custodian institutions shall ensure that the information provided is true, accurate, and complete.

Article 13

Issuers may choose the currency of denomination for the raised funds based on their actual needs. Issuers are encouraged to choose the Renminbi as the currency of denomination.

Funds raised by issuers shall, in principle, be used offshore. If funds are intended to be used onshore, relevant national regulations on cross-border capital management shall be observed.

Article 14

Issuers shall disclose relevant information during the term of FTZ offshore bonds in accordance with the arrangements set forth in the offering documents.

Issuers shall disclose information relating to FTZ offshore bonds through the registration and depository institutions in a true, accurate, complete, and timely manner, and shall not engage in false statements, misleading representations, or material omissions.

Article 15

Investment entities in FTZ offshore bonds are supported in conducting transactions through over-the-counter or exchange-based markets.

Investment entities shall handle relevant clearing and settlement business in accordance with the law through custodian institutions, commercial banks, and others.

Article 16

Custodian institutions, underwriting institutions, and other relevant entities shall, based on regulatory requirements, accurately and timely submit relevant information, effectively fulfill responsibilities of anti-money laundering, counter-terrorist financing, and anti-tax evasion, and ensure that relevant business activities are conducted under regulatory compliance.

Article 17

Relevant entities participating in FTZ offshore bond business shall establish corresponding business decision-making mechanisms, adopt risk prevention and control measures, enhance risk response capabilities, and guard against risks such as defaults of FTZ offshore bonds.

Article 18

Support is provided for the establishment and improvement of cross-border regulatory and law enforcement cooperation mechanisms for FTZ offshore bonds, for strengthening the protection of cross-border investment entities, and for preventing and resolving cross-border risks.

Support is also provided for the FTZ offshore bond market to strengthen cooperation and exchanges with countries or regions such as Singapore, London, and Hong Kong.

Article 19

Relevant entities participating in FTZ offshore bond business may agree on methods and the applicable law for resolving foreign-related civil disputes according to law.

Relevant entities are encouraged, on the basis of equality and voluntariness, to give priority to the application of the laws of the People's Republic of China, and to give priority to resolving foreign-related civil disputes through judicial authorities, arbitration institutions, or mediation organizations of this Municipality. If the parties choose arbitration as the means of dispute resolution for foreign-related civil disputes and make a written agreement on the seat of arbitration, they are encouraged to choose Shanghai as the seat of arbitration.

Relevant entities participating in FTZ offshore bond business are encouraged to apply for financial market case testing.

Article 20

Where relevant entities participating in FTZ offshore bond business disrupt the order of the domestic market or infringe upon the lawful rights and interests of domestic entities through fraudulent issuance or other improper means, they shall be dealt with and held legally liable in accordance with relevant domestic laws and regulations.

Article 21

Under the guidance of the financial regulatory departments under the State Council and their Shanghai-based institutions, this Municipality supports the establishment of a self-regulatory mechanism for FTZ offshore bonds, improves the self-regulatory rules, business guidelines, standard agreement texts and other instruments, regulate the market development, and strengthen investor protection.

Article 22

The People's Government of Pudong New Area and the Administrative Committee of the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone are to formulate relevant supporting policies for FTZ offshore bonds.

This Municipality is to use the Shanghai Financial Development Fund to provide dedicated support for FTZ offshore bond business for a certain period of time.

Article 23

These Provisions shall come into effect on March 1, 2026.