On August 30, SZSE issued the Administration Measures for Risk Classification of Listed Companies (the “Classification Measures”). It is an important measure of SZSE to advance classified, targeted and technology-based regulation, refine the risk control and prevention system and improve the efficiency of front-line regulation.
Technology enables classified regulation
Classified regulation is a basic approach and effective way to implement the regulatory requirements on listed companies. In recent years, SZSE has made full use of cutting-edge technologies such as artificial intelligence (AI) and big data, developed an intelligent risk monitoring platform, and promoted deep integration of regulatory experience and intelligent technologies. On the basis of summing up regulatory practice and experience, the Classification Measures further refines the risk classification regulation system, an active exploration of the “human+technology” new regulatory model.
The intelligent risk monitoring platform has gathered multidimensional information including financial data, stock price movements, equity details, share pledge, significant investments, violations and punishment, and its risk classification and rating model have realized “comprehensive checkup” of listed companies, providing intelligent aid to the analysis, evaluation and judgment of company risks. With the classification and rating module identifying risks, the risk ledger module tracking risks throughout the whole process and the dynamic risk monitoring module monitoring risks in real time, the intelligent risk monitoring platform has formed a multi-tiered, multidimensional, full-chain risk monitoring system that can effectively support early detection, regular tracking and quick handling of risks.
Classified policy implementation promotes targeted regulation
Following the train of thought on regulation of “grasping two ends and promoting the middle”, the Classification Measures has made it clear that SZSE will make differentiated regulatory arrangements for different types of companies, to optimize allocation of regulatory resources and improve the precision of regulatory work. The Classification Measures states that SZSE will take a “zero tolerance” attitude towards actions in violation of laws and regulations such as financial fraud, occupation of funds and illegal guarantee, channel major regulatory resources into listed companies in the high risk and secondarily high risk categories, and pay close attention to their information disclosure, M&A and reorganization, refinancing, etc. Regarding high-risk companies, the Classification Measures stipulates that they will not be given an A in the evaluation of information disclosure, their information disclosure express practice qualification will be canceled, their annual report will be subject to double review, and they shall make public the inquiry letter on annual report and relevant reply and so on, so as to guide listed companies to focus on main business and operate with integrity and according to standard. The Classification Measures has further defined the responsibilities of intermediaries and urged them to be diligent and responsible. Moreover, the Classification Measures has focused on the “critical minority” such as de facto controller, directors, supervisors and senior management, increased the frequency of compliance training for relevant personnel, and urged them to understand rules, hold on to the bottom line and hold discipline in awe, to facilitate improvement in the quality of listed companies from the source.
Resource sharing strengthens regulatory coordination
The Classification Measures has defined the working mechanism to effectively use classified regulation information. First, SZSE will improve the communication and coordination mechanisms on classified regulation with CSRC and its local offices to share regulatory resources, promote regulatory coordination, jointly defuse listed company risks and facilitate improvement in the quality of listed companies. Second, SZSE will report relevant information to the local government, and cooperate with the local government in forestalling and defusing company risks. Third, SZSE will notify high-risk companies of their risk ratings, enhance the urging and warning functions of classification and rating results on listed companies, and improve the consciousness and initiative of listed companies for standard operation.
SZSE will earnestly implement the requirements in the speeches of Vice Premier Liu He and CSRC Chairman Yi Huiman at the listing ceremony of the first group of enterprises under the reform of the ChiNext Board and the pilot project of the registration-based IPO system, and adhere to the principles of “system building, no intervention, and zero tolerance”. SZSE will, according to the work requirements of revering the market, revering the rule of law, holding high professionalism, staying alert to risks, and obtaining support from various parties and centering on the core objective of facilitating improvement in the quality of listed companies, continue to refine basic systems, focus on enhancing regulatory efficiency, ensure the implementation of the Classification Measures, advance classified, targeted and technology-based regulation, put forth effort to help listed companies improve information disclosure quality and the level of standard operation, strive to form a group of listed companies that demonstrate high-quality development and jointly build a good capital market ecosystem.
