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Since the beginning of this year, SZSE has continued to promote the reform of the trading suspension and resumption system, resolutely curb the phenomenon of "free trading suspension", "arbitrary trading suspension" and "long-term trading suspension", and earnestly safeguard the legitimate rights and interests of investors, such as trading rights and right to know. Under the joint efforts of all parties involved in the market, the number of shares suspended by the SZSE-listed companies has decreased significantly recently, and new changes have occurred in the trading suspension and resumption in mergers and acquisitions.
The number and time of restructuring suspensions have dropped significantly
As of August 3, the number of trading suspension of the SZSE-listed companies was 77, accounting for 3.64% of the total number of the SZSE-listed companies, of which 15 companies were suspended from the ChiNext Board, accounting for only 2% of the companies listed on the ChiNext Board. Among them, 66 companies were suspended due to the planning of major asset restructuring, accounting for 3.12% of the total number of the SZSE-listed companies, and the number of restructuring suspensions was only about half of the same period of last year. About 64% of the shares suspended for restructuring were suspended within 2 months, and 18% of the shares were suspended for 2-3 months. Only a few companies suspended the trading for more than 6 months due to major and non-precedent matters. Compared with the same period of last year, the number of shares that have been suspended for a long time has been reduced by more than half, and the number of shares with a suspension time within two months has increased significantly.
The disclosure of the reason for restructuring suspension is more detailed
Since the issuance of the "Memorandum on the Suspension and Resumption of Trading of Listed Companies", the SZSE-listed companies have been able to disclose the details of the planned matters in the trading suspension announcement, and are not generally described as "planning major matters". At the same time, most listed companies explicitly disclosed the restructuring with the underlying assets, the counterparty, the transaction method, the main contents of the restructuring framework agreement, and the name of the intermediary institution in the trading suspension announcement when applying for the suspension of major asset restructuring. The quality of information disclosure for restructuring suspension has been improved. On one hand, more detailed announcement has reduced market speculation and rumors, allowing investors to grasp information as soon as possible, clarifying suspension expectations and effectively protecting investors' right to know; on the other hand, more detailed announcement strengthens the prudence of listed companies to apply for trading suspension, reduces the long-term trading suspension, promotes the return of the trading suspension and resumption system, maintains the market fair and orderly, and effectively protects the trading rights of investors.
Trading suspension is no longer the only way to restructuring
Affected by factors such as investor structure and trading habits, the trading suspension and resumption system in the A-share market carries the functions of preventing and controlling insider trading and locking transaction prices. In the past two years, after continuous publicity and guidance, listed companies have gradually accepted the practice of non-trading-suspension promotion when planning non-public offering, transfer of control rights, and external investment. However, for matters involving major asset restructuring, some listed companies are often worried that the transaction could not be successfully achieved due to insider trading or stock price changes, and they still hope to apply for long-term trading suspension to prevent these "risks". This phenomenon has been significantly improved this year. In the SZSE, 17 companies did not apply for trading suspension when they planned to restructure. Instead, they directly disclosed the restructuring plan or disclosed the reminding announcement, and smoothly promoted the restructuring.
The principle of phased disclosure is gradually recognized
By the end of July 2018, 49 listed companies had applied for trading resumption and continued to carry out restructuring matters. Among them, 19 companies had suspended trading for less than one month and 20 companies had suspended trading for two to three months. In the past, listed companies won't apply for trading resumption until the maximum period allowed by the rules was expired. More and more companies choose to suspend trading for a short time. After clearing the nature and influence of the planned matters, the listed companies timely apply for share resumption to continue to promote such matters. The disclosure of the restructuring matters in the trading resumption announcement is becoming more and more specific. More importantly, among the 49 companies that resumed trading and continued restructuring, about 60% of the restructuring plans involved share offering. These companies did not apply for a long-term trading suspension due to the need to "lock the price", which indicates that listed companies gradually accept the market-oriented pricing mechanism and no longer rely too much on the trading suspension to lock the price of shares.
In the next step, the SZSE will continue to improve the trading suspension and resumption system of listed companies, strengthen the frontline supervision function, guide listed companies to prudently apply for trading suspension, maintain transaction continuity and market liquidity, and fully protect the legitimate rights and interests of investors. First, SZSE will be stricter on the application for trading suspension and effectively prevent "free trading suspension" from the source; second, SZSE will strengthen the supervision of information disclosure, it will require listed companies to disclose in detail the reasons for trading suspension and specific matters in the trading suspension announcement, strictly control the inconsistency of information disclosure during the suspension period, and effectively curb "arbitrary trading suspension"; third, SZSE will shorten the trading suspension period, urge listed companies to speed up the assessment and audit work and fulfill the approval procedures, and focus on avoiding "long-term trading suspension"; fourth, SZSE will require listed companies to improve insider information management, enhance the sense of confidentiality of all parties, and guide listed companies to reduce their reliance on trading suspension when planning major matters.
