Core Viewpoint - The development of offshore bond business in the free trade zone is expected to receive significant policy support from the Shanghai government, as indicated by the draft regulations currently under review [1]. Group 1: Basic Concepts and Work Mechanism - The draft regulations define offshore bonds as debt financing tools issued by foreign entities through a free trade account, primarily targeting overseas investors [2]. - The responsibilities of the municipal government and the Pudong New Area government in promoting the offshore bond business are clearly outlined [2]. Group 2: Business Rules and Market Order - The regulations specify the scope of issuers and investors, detailing the qualifications required for issuers to ensure compliance in the issuance and investment of offshore bonds [2]. - Types of underwriting institutions are defined, allowing qualified entities to participate in the underwriting of offshore bonds [2]. - A registration and custody system is established, designating primary and secondary custodians to provide related services for offshore bonds [2]. - Fund usage is regulated, with a principle that raised funds should primarily be used overseas, and any domestic use must comply with national cross-border fund management regulations [2]. Group 3: Risk Prevention and Regulatory Efficiency - Issuers are required to disclose information during the bond's duration, enhancing transparency [3]. - Relevant parties must implement risk prevention measures to mitigate default risks and fulfill responsibilities related to anti-money laundering, anti-terrorism financing, and anti-tax evasion [3]. - A cross-border regulatory and law enforcement cooperation mechanism is to be established to protect cross-border investors and mitigate risks [3]. - A self-regulatory management mechanism for offshore bonds is encouraged to improve self-regulatory rules and protect investors [3]. Group 4: Policy Empowerment and Practical Needs - Financial institutions with free trade accounts in Pudong can invest in offshore bonds according to national management requirements [3]. - Relevant parties are encouraged to resolve disputes under Chinese law [3]. - Legal responsibilities will be prioritized under domestic laws for parties that harm the legitimate rights of domestic and foreign entities through fraudulent issuance [3]. - The Pudong New Area government and the Lingang New Area Administrative Committee will formulate supporting policies for offshore bonds, with financial support from Shanghai's financial development funds [3].