On January 30, the China Securities Regulatory Commission published the “Opinions on the implementation of the creation of the Council on Science and Technology and the Pilot Registration System on the Shanghai Stock Exchange” (hereinafter referred to as the “Opinions on the Implementation”). The China Securities Regulatory Commission and the Shanghai Stock Exchange are in the process of creating a council for science and technology and will test the registration system in accordance with the requirements of the Implementation Conclusion.
Reporter "Daily Economic News" noted that "Opinions on the introduction of" contain detailed provisions for exclusion from the list of enterprises of science and technology. Clearly allow the stock exchange to increase delisting indicators based on market value based on existing delisting indicators of the trading class: if a market order is seriously violated, the investor’s rights are seriously damaged, and the company is not corrected within a specified period, the exchange may stop listing the shares. From a procedural point of view, the science and technology council no longer establishes a suspension of listing, resumption of listing and re-listing, and the delisting process is more concise and clear.
The delisting system is strictly regulated on three sides.
The list and exclusion of enterprises from the list is the “import” and “export” of enterprises entering the market of science and technology councils, which is directly related to the positioning on the market of science and technology councils and the future ecology of the market. What are the provisions on listing conditions and delisting standards of the Shanghai Stock Exchange (“Stock Listing Rules”) (hereinafter referred to as the “Listing Rules”)?
The main idea of the exchange is to formulate more inclusive listing conditions and strictly implement a delisting system to smooth out the “import” and “export” of the market. It is worth noting that in the delisting standard, the Council on Science and Technology focused on the application of “rigor”. When developing a de-listing system on the Science and Technology Council, existing de-listing methods are fully borrowed, and key points are strictly regulated in terms of standards, procedures, and implementation.
First, standards are stricter. In the case of mandatory delisting of large illegal cases, the results of recent delisting system reforms were absorbed, and major illegal violations, such as large illegal information disclosures and public security violations, were clarified, and in case of delisting, market indicators were constructed volumes and stocks. Four types of de-listing standards, such as price, number of shareholders and market value, a system of indicators is more complete and complete: in terms of financial indicators, quantitative reserves are created on a qualitative basis, and the basic characteristics of an “empty” enterprise of the main business that has lost its ability to maintain activities are characterized by various aspects. One continuous loss elimination indicator is no longer used. As for other compliance indicators, based on the retention of existing delisting indicators, such as the inability to disclose financial reports in a timely manner, their publication with non-reporting reports or negative opinions and an increase in the number of deviations from conformity, such as serious disclosures of disclosure or standard operation, ,
Secondly, the procedure is more stringent. Simplify the delisting process, cancel the listing suspension and resume the listing process, and also directly stop listing the companies that should be delisted, avoiding the long-term detention of large illegal and core “empty” enterprises, disrupting market expectations and pricing mechanisms. A company that has shortened the delisting time and has touched the financial delisting index will implement a warning about delisting risks in the first year, and will still be directly excluded from the list in the second year. No special links will be created for re-listing. If companies not on the list meet the Kechuang Board's listing requirements, they can submit an application and accept the valuation according to the registration procedures and the requirements for issuing and listing shares, but if they are forced to leave the market due to serious illegal violations, the new proposals cannot be offered. Make a listing application and leave the market forever.
Third, the implementation is more stringent. An unsolved problem in the implementation of the existing delisting system is that individual “empty” enterprises smeared financial data and avoided the purpose of delisting through transactions that did not have a commercial meaning. In order to solve this “difficult problem”, the delisting system on the Science and Technology Board specifically states that if the operating profit of the company is mainly derived from a trading business not related to the core business, or income from the relevant transaction that does not have a commercial entity , that is, evidence that the company has already Obvious loss of ability to continue operations will be excluded from the lists in accordance with the established conditions and procedures.
Direct delisting when it comes to delisting requirements
Regarding the issue of delisting of the Council for Science and Technology, the “Opinions on Implementation” clearly allow the stock exchange to increase delisting indicators based on market value, based on the existing indicators of trade delisting, scientific and technical companies are fraudulent issuance, disclosure of the main information is illegal or other countries are involved. In the case of large illegal activities in the field of security, public safety, etc. Shares should be terminated, if trade indicators, such as the volume of shares traded by Science & Technology Co., Ltd., reach the end of the listing criteria, the shares should be terminated, -technical company loses the ability to continue operations, and financial indicators are faced with termination of listing. In the standard, the shares must be terminated, the company does not apply a single listing indicator with the cessation of continuous loss and establishes a combined termination indicator, which reflects the company's ability to continue its operations.
From a procedural point of view, Kechuang Board no longer establishes a suspension of listing, resumption of listing and re-listing, and the delisting process is more concise and clear.
In this regard, capital management partner Chen Yanli told the Daily Economic News reporter that the creation of a science and technology council has increased the supply of technology companies in the market, which contributes to the false existence of market forces, so the really valuable technology companies get the market. confession. For technology companies listed on the Type A stock market, the creation of a science and technology council is a touchstone: in the past, the “frozen concept” of pseudo technology stocks will lose the deficit if supply increases, and an evaluation system for such enterprises will appear. to change. On the contrary, some technologies of “real power” of enterprises will be recognized by the market, and funds will be given preference to leading enterprises with basic technologies.
In addition, Chen Yanli believes that the Kechuang Board can dilute traditional indicators, such as profitability, which helps to meet the needs of various types of enterprises at different stages of development. Businesses can better focus on their own operations, and they do not need to dress up as required in the past. The introduction of the Science and Technology Council has enriched and improved the multi-level structure of the capital market in China. The new sector contributes to new institutional mechanisms and contributes to the development and development of the capital market in China. At the same time, the location of the Science and Technology Council contributes to the promotion of economic transformation and modernization of China, and also contributes to strengthening the scientific and technical hard power of China.
Forced delisting will not be recalculated.
The Daily Economic News reporter noted that “Opinions on implementation” also stipulate that Science & Technology Co., Ltd. constitutes fraudulent issuance, serious breaches of information disclosure, or other important issues related to national security, public safety, environmental safety, occupational safety, and public health and safety. In the case of illegal activities, the shares cease. The Shanghai Stock Exchange also announced that a company that shortens the company's delisting time and touches the financial delisting index will introduce a delisting warning in the first year and will continue to be directly excluded from the list in the second year. No special links will be created for re-listing. If companies not on the list meet the Kechuang Board's listing requirements, they can submit an application and accept the valuation according to the registration procedures and the requirements for issuing and listing shares, but if they are forced to leave the market due to serious illegal violations, the new proposals cannot be offered. Make a listing application and leave the market forever.
Regarding this series of regulations, Chen Yanli believes that the registration system has eliminated the shortcomings of the existing approval system and has difficulties in meeting the financial needs of start-ups, as well as expanded the possibilities and methods of local financing of scientific and technical enterprises. Secondly, the Science and Technology Council expanded the PE / VC exit channel, based on the technologies of the institute of reserve investments, in order to increase the viability of the primary market and, thus, more actively serve scientific and technical enterprises. In addition, the registration system reduces rent seeking space, reduces liability and pressure on regulators, and generates fair value through sufficient disclosure and market play to achieve the goal of clearing the market. Unlike previous motherboards, GEM, as well as small and medium-sized motherboards, a company can intensively optimize reform from the base mechanism and has relatively flexible institutional mechanisms in the release and delisting sessions.
Chen Xiwei, a senior private equity analyst, told the Daily Economic News reporter that the creation of the Science and Technology Council had a positive impact on the venture capital market, and opened a mechanism for exiting the venture capital market, creating a real closed loop. Previously, the venture capital market was characterized by a long investment period, weak market liquidity, limited exit channels, etc. Many innovative SMEs encountered difficulties in financing, and a pilot registration system was launched. The problem is that it introduced the "cardiotonic agent" into the future macroeconomic development of China.
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