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Recently, CSRC issued the Decision on Amending the Opinions on Reforming, Improving and Strictly Implementing the Delisting System for Listed Companies (hereinafter referred to as the Decision). The Decision further perfects the content on forced delisting due to material violation of law. Specifically, it expands the circumstances of forced delisting to include fraudulent share offering and illegal major information disclosure, as well as the material illegal behaviors in the fields related to state security, public security, ecological safety, production safety and public heath safety. This amplifies the effect scope of delisting system and achieves the full coverage and zero blind spot of delisting for major violation of law, fully expressing the concept and resolution of strict comprehensive law-based supervision. Accordingly, the document has profound significance and influence on further improving the basic market functions, enhancing the vitality of market players, boosting investors' confidence, cultivating a rational value investment culture and forming a market ecology that features survival of the fittest and orderly entry and exit.
SZSE has always been strictly fulfilling the role of ensuring the implementation of delisting due to major violation of law and has resolutely delisted the shares of companies that fall under the circumstances of delisting. In 2017, SZSE made a law-based decision of delisting the shares of Xintai Electric and smoothly carried out the word on advance compensation. Xintai Electric became the first company in China that is forced to delist due to fraudulent share offering. In 2018, SZSE has successively made the decisions of launching the forced delisting mechanism against Geeya Technology and Yabaite due to suspected criminal cases and transfer to the public security organ by CSRC. Through these practices, SZSE has accumulated experience and offered reference for promoting the market-oriented, legalized and normalized process of delisting tasks. In the early stage, under the unified deployment of CSRC, SZSE had followed the Securities Law and the regulatory practices and started from specifying the implementation standards and procedure of forced delisting for major violation of law to formulate the Implementation Measures on the Forced Delisting for Major Violation of Law by Listed Companies (hereinafter referred to as the Implementation Measures) and solicit the public's opinions thereon from the beginning of March 2018. Next, SZSE will firmly implement the provisions stated in the Securities Law and the Decision to amend and improve the Rules Governing Share Listing, the Implementation Measures and relevant supporting rules to specify the arrangement on no longer differentiating tradable and non-tradable shares in the IPO after split-share reform. The issuance and implementation of such improvement will be subject to the approval of CSRC. Furthermore, SZSE has earnestly shouldered its legal duties of front-line supervision to unswervingly fulfill the entity responsibilities for delisting and strictly guard the implementation of delisting system. In particular, for the companies of major law violation that severely do harm to market orders, infringe the public's interest and cause material social influence, SZSE will resolutely practice the principle of zero tolerance to any company that triggers the conditions for delisting and launch delisting mechanism against such companies to purify the market environment and safeguard the seriousness and authoritativeness of delisting system.
