The SZSE officially released The Rule on Share Listing (Amended in 2014) and Rules Governing the Listing of Shares on the ChiNext Board of Shenzhen Stock Exchange (Amended in 2014) (both hereinafter referred as The Listing Rules), and solicited public opinions on two ancillary regulations of Implementation Measures on Re-listing of Delisting Companies (Amended in 2014) and Special Regulation on Business during Delisting Transitional Period (Amended in 2014).
A SZSE representative in charge indicated that the delisting system for listed issuers was an important fundamental system of the capital market. Recently, China Securities Regulatory Commission (CSRC) issued Opinions on Reform, Improvement and Strict Implementation of Public Company Delisting System (hereinafter referred as Opinions on Delisting), as an important means to fulfil the requirement of ‘Improving the Delisting System’ put forward by the State Council in its official document Further Promotion of Healthy Development of the Capital Market (hereinafter referred as the New National Nine). Opinions on Delisting is of great significance to further improve the fundamental system of capital market, enhance the market function of resource allocation, and protection of legal rights and interests of investors, especially those of vast small- and medium-cap investors. On the basis of extensive solicitation of the public opinions, SZSE revised its The Listing Rules.
This SZSE representative updated the audience on opinion solicitation and revision of The Listing Rules. During the period of solicitation, the SZSE collected opinions from all walks of life by organizing seminars, and by feedback mailboxes and attached great importance to the comments, opinions and suggestions of various media on delisting system reform. The SZSE have received 36 emails, 2 mails and paid close attention to more than 220 influential media reports. On July 21, SZSE organized a listing rule public opinion solicitation symposium, which was attended by representatives from 13 public companies, securities companies and fund management companies.
In general, the reform on delisting system received positive responses from various market participants, with relevant opinions and suggestions primarily concentrated on the protection of the rights and interest of investors, and punishment on major unlawful behaviors. After serious research, the SZSE has made the following supplements and improvements on The Listing Rules: firstly, internal decision-making procedure on initiative delisting has been improved. According to the original regulation, ‘2/3 of voting shares represented by the shareholders attended the meeting is required to pass the resolution’. As the amended regulation stipulates, ‘2/3 of voting shares represented by shareholders except directors, supervisors, senior management, or shareholders alone or aggregately holding more than 5% of the company’s share and who attended the meeting is required to pass the resolution. Secondly, the condition for trading resumption or re-listing of companies delisted due to the major violation of the information disclosure regulation has been clarified. The regulation on ‘comprehensive rectification of violation behaviors, and dismissing or replacement of the relevant personnel and appropriate arrangement on taking the responsibility of civil compensation’ have been elaborated in detail, and ‘restriction on reduction of shareholding of relevant subjects’ has been stipulated. Thirdly, the risk notice during the investigation period of listed companies has been strengthened. On the basis of the original regulations that provided that the companies under investigation for suspected major law violation should disclose the notice of risk of listing suspension once a month, the amended regulation has increased the frequency of disclosure of risk notice a the board of directors or the SZSE deems necessary. Fourthly, reexamination procedures of application for re-listing have been added. To guarantee the fairness of the procedure, the reexamination procedure on the applicators’ decision on re-listing has been reinforced so as to substantially protect the interests of applicators and vast investors.
The SZSE representative indicated that SZSE is responsible for implementing the delisting system. The SZSE will, in line with the requirement of Opinions on Delisting and The Listing Rules, will amend the ancillary rules of the delisting transition, the re-listing of delisted companies as soon as possible, and intensify implementation of the delisting system. All companies that should be delisted will be delisted so that seriousness and authority of the delisting system is maintained.