The Shenzhen Stock Exchange recently promulgated the “Sponsoring Guidance of Small and Medium-Sized Enterprises (SMEs) Board of the SZSE” specifying obligations and rights of sponsor agencies and representatives on scrutiny as well as more detailed requirements on supervisions, suggesting, site check and internal system set-up.
Since the release of “SMEs Sponsoring Guidance” in August 2004, the SZSE has been implementing the principles and achieved obvious improvement in regulated operation and information disclosure. However, there are still some problems such as less attention on supervision after sponsoring and listing, unfamiliarity with supervision rules and etc.
The SZSE further explored problems this time and gave clear requirements and criterion with experience from mature overseas markets.
Obligations of sponsor agencies and representatives are elaborated to urge them to carry out their responsibilities in compliance with signed agreements including checking fund accounts of listed companies at any time and timely submission of relevant documents by applicants.
New requirements on work transfer when adding new agencies and representative were forged.
It is also ruled that sponsor representatives should carry out on-site inspection at least once for every quarter and give training to involved people for every half-year. Detailed requirements were given to training and inspection tailored for listed companies with significant irregularities.
Sponsor agencies are encouraged to optimize internal controlling system. They should establish complete continuous supervision process, monitor and review systems, and training and quality evaluation systems.
Principals from the SZSE noted that sponsor agencies and representatives should learn and operate amended guidance in a bid to lift supervision quality. The SZSE would give assessments to those listed companies annually according to the Guidance.