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The Shanghai Stock Exchange (SSE) publicly criticized 3 listed companies and relevant personnel, criticized 21 companies and relevant personnel in circulars, concluded investigation of 185 abnormal trading cases and restricted a number of account transactions in the 3rd quarter this year, according to its 3rd quarter report on self-regulation management of 2009 published yesterday.
From July to September, the SSE conducted a series of self-regulation supervision over listed companies' information disclosure, membership management and market trading behaviors: first, laying a more solid foundation for self-regulation supervision by making special supervision and examination on business rules and perfecting disciplinary punishment mechanism; second, publishing business rules including the "SSE Guidelines for Continuous Supervision over Listed Company” to impose more severe punishment on listed companies for their violations; third, urging its members to strengthen client management through business and technical supervision; fourth, improving supervision effectiveness by deterring speculations in time and cracking down on short-term manipulations.
This quarter, the SSE Disciplinary Committee reviewed disciplinary punishments over 29 suspected violations including opening price manipulation and short-term transaction, which exerted a positive influence on strengthening supervision over illegal acts and enhancing supervision authority. In addition, the SSE publicly criticized 3 listed companies and relevant personnel, criticized 21 companies and relevant personnel in circulars and expressed supervision concerns to relevant behaviors and events of 17 listed companies. It is learnt that the SSE found in its supervision over listed companies that the violations in the 3rd quarter mainly involved illegal disclosure of information and breaking of commitments made in equity division reform.
As for members' client management and technical risk control, the SSE took the following measures: promoting members' client management and reinforcing members' technical management; perfecting supervision measures over members to guide members to do a good job in risk disclosure; stressing joint supervision and communication and cooperation outside the bourse with a view to perfecting member supervision rules and systems. Moreover, the SSE, after consulting its relevant departments, further perfected the "Detailed Rules on Administration of Non-member Transaction Participants” (First Draft) to strengthen the construction of member management system.
It is also noted in the report that the SSE will further intensify punishment over listed companies for their violations to improve the supervision effectiveness by deterring speculation in time and cracking down on short-term manipulation. Since the re-launching of IPO in the 2nd half of the year, the SSE has made centralized deployment and careful arrangement to prevent the possible over-speculation of new shares. Furthermore, great efforts were made to monitor and stop the short-term manipulation such as call action manipulation and closing price manipulation with active supervision measures. On the other hand, the SSE effectively raised its supervision deterrent and effectiveness in terms of supervision over to-be-due warrants and shareholding decrease of non-tradable shares. Aiming at the frequent occurrence of illegal shareholding decrease of non-tradable shares, the SSE intensified its efforts in monitoring and striking.
According to statistics, in the 3rd quarter, the SSE concluded investigation of 185 abnormal trading cases in total, with 70 written warning letters issued and a number of account transactions restricted. Besides, upon investigation and analysis, a stream of clues to violations including market manipulation and insider dealing were discovered in time and reported to the China Securities Regulatory Commission for case placing and further investigation.
