Shenzhen Stock Exchange (SZSE) has recently released the Rules of Shenzhen Stock Exchange Governing the Listing of Securities Investment Funds (2017 Exposure Draft) (hereinafter referred to as “the Rules”) and solicited public opinions. This is to strengthen the regulation of securities investment fund listing, delisting and information disclosure, enhance the risk prevention for structured funds, and protect the legitimate rights and interest of investors.
An SZSE principal said that amendments to the Rules mainly include the following aspects compared with the existing fund listing rules in use. First, the approval procedures regarding fund listing and delisting are improved. A mechanism of listing committee deliberation is introduced so that SZSE’s listing committee could make independent professional judgment and form review opinions on fund listing and delisting matters. Second, the arrangement of small-scale fund delisting is improved. An observation period of fund delisting is added. When a fund is no longer eligible for listing and relevant unqualified listing conditions are not addressed within the observation period, the fund will enter delisting procedures. In addition, in order to protect fund holders’ rights and interests, fund managers are required to choose fund conversion, liquidation or other delisting implementation plans within a provided period when the funds enter delisting procedures. Also, fund managers and SZSE members are requested to intensify risk reminder efforts when funds are likely to trigger or have triggered delisting conditions. Moreover, the supervision over structured funds is enhanced to impose stricter delisting conditions. Third, investor protection and adequacy management on special funds are reinforced. The Rules stated that when structure-complicated and high-risk funds go listing, they should be designed with investor adequacy arrangements that conform to SZSE’s regulations. Fourth, supervision is strengthened and business handling is optimized. The Rules has further specified the regulatory measures available to impose on fund information disclosure obligators who get out of line and their information disclosure principals. Besides, routine trading suspension for regular businesses is cancelled and fund listing application materials are simplified.
The deadline for soliciting opinions on the Rules is July 2, 2017. SZSE will make improvements in time as per the opinions of all market participants.
