THE guidelines on the issuance of bonds in line with the standards of the Association of Southeast Asian Nations (Asean) secured regulatory approval.
The Securities and Exchange Commission (SEC) en banc approved the “Guidelines on the Issuance of Social Bonds under the [Asean SBS] Social Bond Standards” and the “Guidelines on the Issuance of Sustainability Bonds under the Asean Sustainability Bond Standards [SUS]” through Memorandum Circular 8 and MC 9, Series of 2019.
The Asean SBS intend to enhance transparency, consistency
and uniformity of the Asean Social bonds, which will also contribute to the
development of a new asset class, reduce due diligence cost and help investors
to make informed
investment decisions.
The Asean SUS aims to provide guidance on the issuance of Asean Sustainability Bonds where the proceeds will be exclusively applied to finance or refinance a combination of both green and social projects that offer environmental and social benefits, respectively.
The Asean SBS was developed based on the International Capital Market Association’s Social Bond Principles (SBP), first launched in June 2017 as voluntary process guidelines intended for broad use by the market.
The SBP and Green Bond Principles are a set of voluntary guidelines elaborated by key market participants under coordination of the ICMA as its secretariat, which is responsible for advising on governance and other matters, as well as providing organizational support.
The Asean SUS were developed based on ICMA’s Sustainability Bond Guidelines.
Under the guidelines, to be eligible to issue an Asean Social Bond and an Asean Sustainability Bond, Issuers must be incorporated in any of the Asean member-countries. A non-Asean Issuer may also issue Asean Social/Sustainability Bonds, provided the eligible projects are located in Asean. Asean Social/Sustainability Bonds issuances must also be originated from any of the Asean member-countries.
“These guidelines aim to further develop sustainable financing in the local market,” the SEC said.
“Additionally, with the global move towards sustainable development, and the growing demand for sustainable investments, SEC hopes that these Guidelines will assist companies in attracting global investors who have committed to increasing their green and social impact.”