Shanghai Stock Exchange: First Electronic Offline IPO Succeeds

Through initial research and preparation, as the first electronic offline issuance on the Shanghai market, the electronic offline IPO of Jinduicheng Molybdenum Group Co., Ltd. was officially launched on March 28, 2008. All work was running smoothly with the allotment result announcement published on April 11. The IPO Electronic Offline Subscription Platform (the Subscription Platform) of the Shanghai Stock Exchange (SSE) is under normal operation. The first issuance succeeded with timely and complete fund-receiving-in-account and refundment.

In this offline issuance, 150 inquirees quoted through the Subscription Platform during the period of the preliminary inquiry and sent 158 inquiry records; during the accumulative bidding and subscription period, 220 allotees subscribed through the Subscription Platform and sent 229 bidding records; during the fund transfer period, 212 allotees actually transferred the subscription funds of RMB 158.667 billion in 226 transactions. Except for 4 inquirees who haven’t opened their accounts at the 15 designated banks for settlement, only 1 inquiree conducted interbank fund transfer among the 15 banks.

Electronic offline IPO aims to release large-scale interbank fund flow, improve the offline IPO efficiency, and optimize the business processes of market participants including underwriters, inquirees and allotees. Compared with previous issuance method, electronic offline IPO does not change the legal relationship among all parties. Lead underwriters entrust the SSE and the Shanghai Branch of China Securities Depository and Clearing Corporation Limited (SD&C) with the offline IPO through the SSE Subscription Platform and the fund settlement system of the Shanghai Branch of SD&C, to recognize the final allotees and to supervise whether their fund subscription conforms to the supervision requirements. The beneficiary banks, increasing from several ones to 15 banks, help to solve the problem brought in by large-scale interbank flow of offline subscription fund. Through electronic quotation and the automation of the Subscription Platform, manpower and material resources of lead underwriters and inquirees are saved with the improved efficiency in offline issuance. From now on, offline IPO on the Shanghai market will be mainly conducted in electronic manner.