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Upon approval by the China Securities Regulatory Commission, the Shanghai Stock Exchange (SSE) formulated the "SSE Provisional Rules on Review System", which is issued and implemented today. The commissioner list of the 1st Review Committee, established according to the rules, is also officially released to the public.
When establishing the Review Committee to improve the review system, the SSE takes the following four aspects into consideration.
Firstly, to continuously implement the new Securities Law. Improvement of the review system and establishment of the Review Committee help the SSE to deepen the implementation of the new Securities Law, standardize self-regulation management and enhance the supervision according to law. On the one hand, the new Securities Law further defines the legal status of the exchange's self-regulation management, entitling the exchange to the examination rights of securities listing, suspension and delisting. Meanwhile, the exchange is required to set up a review organ to review the dissents of parties concerned over decisions on listing, suspension and delisting. On the other hand, the SSE's Listing Rules, Trading Rules and Member Management Rules also stipulate that parties concerned can apply for review concerning severe disciplinary punishment and regulatory measures.
Secondly, to continuously improve the organs and procedures of self-regulation management. The Review Committee, set up by the SSE, helps to realize the specialization and systematization of the review function, which are commonly adopted by exchanges on overseas mature markets in internal governance and self-regulation management. All this has further perfected the organ, mechanism and procedures of the exchange's self-regulation management, thus enhancing the marketization, standardization and legalization level of self-regulation management.
Thirdly, to effectively protect the legitimate rights and interests of the main players on the market. It is normal that different main players on the market, such as the member companies and the listed companies, voice dissents over the exchange's self-regulation management and regulatory measures. Improvement of the review system and establishment of the Review Committee will provide the exchange with effective system guarantee to hear different opinions and appeals from the regulatees and guarantee their deserved entities' and procedural rights and interests.
Fourthly, to diversify the dispute settlement mechanism on the securities market. The exchange's self-regulation management focuses on the maintenance of market order and the realization of public interests, leading to an unavoidable conflict with the individual and short-term interests of the main players on the market. Improvement of the review system and establishment of the Review Committee will provide the regulatees with relief channels for these rights. All this helps to timely settle disputes among industry and market organizations to further decrease unnecessary litigations.
The 1st SSE Review Committee, a special committee under the Board of Governors, has a total of 11 commissioners appointed by the Board from qualified professionals. The committee will take charge of the review issues concerning different main players on the market such as the listed companies and the securities dealers from different industries including law, accounting and securities. Taking this into account, the committee consists of representatives in a proper proportion to member companies and listed companies, law and accounting professionals and insider experts, who enjoy good reputations on the market and in the industry. All this has guaranteed the representativeness, specialty and authoritativeness of the committee.
The rules announced by the SSE clearly defines the review scope, the basic functions of the committee, the commissioner qualifications and the review procedures, which are the direct base on which the committee fulfills its duties. According to the rules, the commissioners will independently fulfill their duties in the name of an individual and will not be interfered by any unit or individual. A direct or indirect interest-related commissioner should apply for challenge in time in the review.
