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I. We noticed that recently some enterprises had withdrew applications, following the random on-site inspection initiated by the CSRC of information disclosure by the first batch of enterprises listed on the ChiNext Board. Please brief on enterprises listed on the ChiNext Board. And what’s the opinion of SZSE?
Answer: Totally 11 declared projects on the ChiNext Board were involved in the on-site inspections of information disclosure by the first batch of enterprises listed on the ChiNext Board. The issuers and sponsor institutions of nine projects withdrew application and revoked sponsorship within 10 working days on receiving written notification of on-site inspection. Among them, six were in the phase of the first round of inquiry and reply. SZSE was concerned with such case and analyzed relevant matters. As far as we can see, there are several reasons that lead to withdrawal of projects. In terms of issues related to information disclosure and sponsor institution review, SZSE has paid special attention during the review.
On-site inspection of declaring enterprises is a key link in the full-chain regulation of the review of issuance and listing, and a crucial mean to enhance the regulation over information disclosure by the first batch of enterprises listed on the ChiNext Board and to strictly control the access to listing. It also is an important mechanism and arrangement for adhering to “three principles” of the reform of the registration-based IPO system, proceeding steadily with the reform, and safeguarding the stable and far-reaching development of the ChiNext Board. SZSE will, according to the arrangements of the CSRC, make active efforts to fulfill the on-site inspections and adopt self-disciplinary measures corresponding to inspection results, so as to improve the quality of listed companies at the source.
II. How dose SZSE control the “entrance” for listed companies in the review of issuance and listing under the registration-based IPO system?
Answer: By sticking to the general principle of pursuing progress while ensuring stability, SZSE has focused on building an open, transparent and predictable review mechanism and made all-out efforts to guarantee smooth and well-organized review of the registration-based IPO system on the ChiNext Board. Since the pilot project of the registration-based IPO system on the ChiNext Board, SZSE has applied 13 self-disciplinary measures and issued 17 letters of regulatory attention to non-compliant enterprises, intermediaries and concerned personnels of 18 IPO, refinance and reorganization projects. SZSE has also circulated the treatment in the whole industry on a regular basis to warn against and deter from non-compliance.
In case of any major problem or irregularity of issuer in the review, SZSE has been problem-oriented and employed field supervision to sponsor institutions and promote the duty performance of intermediaries. Till now, SZSE has implemented field supervision to sponsor institutions of 32 IPO projects, among which 20 projects had revoked applications. SZSE has terminated the review of 56 enterprises, accounting for 20% of enterprises which had been subject to the review of the Listing Committee and whose review was terminated. SZSE conducted targeted and continuous inquiry to urge enterprises to fully disclose, and terminated the review according to the regulation for enterprises failing to reply in time or replying beyond the required time frame. As of now 10 enterprises has revoked applications due to failure of replying inquiries timely and their review has been terminated.
III. What regulatory measures will SZSE take in the next step to deal with project withdrawal in this on-site inspection?
Answer: In compliance with the arrangements of the CSRC, SZSE will earnestly practice the principles of “system building, non-intervention and zero tolerance”, stick to the principle of being open-minded, transparent, honest and strict, make full use of the linkage among on-site inspection, field supervision and review and inquiry, and control strictly the “entrance” of listing. In case of material violations such as financial fraud and false statement identified in the projects withdrawn before on-site inspection starts, sponsor institutions and issuers should also bear certain responsibilities. There is no tolerance of withdrawn with no consequences and listing with violations.
