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In order to implement the requirements of the new Securities Law, continue to propel the reform in the pilot program of the registration-based IPO system for the Sci-Tech Innovation Board (STAR Market) of the Shanghai Stock Exchange (SSE), further standardize and enhance the work in issuance and listing review, and improve the quality of listed companies from the source, with the approval of the China Securities Regulatory Commission (CSRC), the SSE issued today the newly revised Rules of Shanghai Stock Exchange for Issuance and Listing Review of Stocks on the SSE STAR Market (the "Review Rules" for short) and the Measures of Shanghai Stock Exchange for Administration of the SSE STAR Market Listing Committee (the "Administration Measures for Listing Committee" for short).
The revisions to the Review Rules have been made mainly in the following three aspects: First, the provisions of the new Securities Law are implemented. The review content and opinions are expressed as reviewing whether the issuer meets the conditions for issuance, the conditions for listing and the requirements for information disclosure, and the corresponding consideration or review opinions will be issued; it is stipulated in the time limit for review that the total time for the exchange’s review and the registration with the CSRC will not be more than three months starting from the date of accepting the application documents for issuance and listing; the provisions on the matters to be deducted in the time limit for review are improved, as the periods of time for the circumstances such as suspension of consideration, dealing with matters after the review meeting, calling for the special inspections and requiring the issuer to supplement or modify application documents are added as the matters to be deducted; it is required that the issuers should publish the documents for information disclosure on the website of the SSE as well as the websites that meet the conditions stipulated by the CSRC in accordance with the rules. Second, the revisions are adapted to the newly amended and issued other rules. In accordance with the relevant provisions of the Measures for Administration of the Sponsorship Business for Securities Issuance and Listing, the qualification restriction measure in the original review rules is adjusted to "being identified as inappropriate candidates"; according to the relevant requirements of the Guidelines for Evaluation of Sci-Tech Innovation Attribute (for Trial Implementation) and the Interim Provisions of Shanghai Stock Exchange on Application and Recommendation for Issuance and Listing on the Science and Technology Innovation Board, the relevant clauses on the positioning of the SSE STAR Market are revised simultaneously; on the basis of the Decision on Amending the "Measures for the Administration of Registration for Initial Public Offerings on the Sci-Tech Innovation Board (for Trial Implementation)", it is made clear that the validity period of the financial reports on the SSE STAR Market can be extended by 3 months, that is, 9 months at the longest. Third, there are other revisions, mainly including the following requirements: besides complying with the provisions of the SSE, the document format should also conform to the relevant rules of the CSRC; it is stressed that the securities service agencies should establish and maintain an effective quality control system and investor protection mechanism; it is stipulated that the exemption from disclosure may be given to the relevant content of the application document for issuance and listing and the replies to the review inquiries of the SSE’s reviewers for issuance and listing; and the circumstances, time and times of consideration suspension by the listing committee are specified.
The amendments to the Administration Measures for Listing Committee are mainly made in the following six aspects. First, in order to implement the relevant requirements of the new Securities Law, it is made clear that the content to be considered by the listing committee should be whether the issuer meets the conditions for issuance, the conditions for listing and the requirements for information disclosure; and the time limit for the advance announcement on the review meeting of the listing committee is shortened. Second, the content to be considered by the listing committee is expanded by adding supporting circumstances related to the listing committee’s considerations in the businesses such as the listed companies on the SSE STAR Market applying for the issuance of stocks, convertible corporate bonds and depository receipts to non-specific targets and the listing as well as the reorganization-based listing. Third, the upper limit of the number of the listing committee members is adjusted by increasing the number to not more than 60, with no lower limit set. Fourth, the mechanisms for meeting suspension and consideration suspension are added, as it is stipulated that that the review meeting can be suspended if force majeure, unexpected events or other special circumstances occur during the meeting, which prevents the meeting from continuing. The listing committee’s review meeting shall be arranged in a timely manner after the causes for the suspension are eliminated; during the review meeting, if it is found that the issuer has major issues regarding conditions for issuance, conditions for listing, or information disclosure that need to be further verified, and no review opinions can be formed, after the discussions at the meeting, the listing committee may suspend the consideration of the issuer’s application for issuance and listing, with the suspension for not more than 2 months. Fifth, the relevant regulatory requirements for the part-time committee members to buy and sell stocks are specified, as it is required that the part-time committee members themselves and their spouses, parents, children, and children’s spouses that hold the stocks of the issuer under consideration or reconsideration during the period of employment shall not buy or accept the stocks, except for the newly added or held shares because of the listed company’s implementation of bonus shares and capitalized shares or equity incentive plans. If the abovementioned parties see new shares added or sell the shares, they should register with the SSE within two working days after the transaction is completed. Sixth, there are other amendments, including refining the mechanism for cancellation of the review meeting, adding the rules for the performance of the duties of the investigated listing committee members suspected of violations, etc.
After the revision and release of the Review Rules and the Administration Measures for Listing Committee, the SSE will effectively organize the implementation of the rules to ensure the new systems will be enforced smoothly.
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