Core Viewpoint - The recent revision of the Shanghai Stock Exchange's "Guidelines for the Review of Corporate Bond Issuance and Listing" introduces stricter requirements for local government financing vehicles (LGFVs), aiming to enhance transparency and promote genuine transformation in the industry [1][3][4]. Group 1: Regulatory Changes - The revised guidelines expand the number of clauses from 56 to 66, introducing new requirements for the disclosure of the "335" indicators, which limit non-operating assets and income to 30% and government subsidies to 50% of net profit [1][4]. - The guidelines require LGFVs to disclose their asset structure, income structure, and profit structure, marking the first formal acknowledgment of the "335" indicators in public documents [4][6]. - The new rules aim to guide LGFVs towards market-oriented transformation and reduce reliance on government resources, thereby improving profitability and debt repayment capabilities [3][7]. Group 2: Market Impact - As of April 2025, the total scale of canceled corporate bond issuances reached 19.815 billion, with local state-owned enterprises accounting for 88.95% of these cancellations [2]. - In the first quarter of 2025, LGFV bond issuance dropped to 15.762 billion, a year-on-year decrease of 13.7%, while net financing fell by 30.2% [2][5]. - The number of first-time issuers among LGFVs decreased by 18 compared to the same period last year, indicating a more cautious approach to bond issuance [2]. Group 3: Trade Business and Risks - The revised guidelines emphasize the need for LGFVs to disclose the rationality and authenticity of their trade business, addressing issues of "pseudo-trade" practices that have emerged in the industry [6][7]. - There are concerns regarding the authenticity of trade operations, with some LGFVs engaging in non-standard practices such as financing trade and "empty transfers" to inflate revenue [7][8]. - The guidelines require LGFVs with significant trade operations to disclose key customer and supplier information, accounting methods, and the commercial rationale behind their trade activities [7][8].