The Shanghai Stock Exchange has released rules on the issue of debt writedowns by commercial banks, the China Securities Journal reported Friday. Under the rules, listed banks, banks whose initial public offering (IPO) applications are under review and those listed overseas are all allowed to issue such debt at the Shanghai exchange as capital replenishment tool, the newspaper said. Issuers either could issue such debt to public investors after receiving approval of the China Securities Regulatory Commission or undertake a private placement after registration with the Shanghai bourse. The number of investors is not allowed to exceed 200 in each private placement, the report said. To control risks, banks are required to enhance information disclosure, and any move that may affect their capital adequacy ratio must be made public, the report said.
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