To implement the requirements of China Securities Regulatory Commission (“CSRC”) on higher-level laws, optimize relevant supporting business rules for the issuance and underwriting of new stocks on the ChiNext Board, facilitate an orderly interaction between buyers and sellers, help market-based issuance and pricing mechanisms effectively play their roles, and keep order and maintain a sound ecosystem in the market, SZSE plans to revise some terms of the Implementation Rules on the IPO Stock Issuance and Underwriting Business on the ChiNext Board (hereinafter referred to as the Implementation Rules on IPO). SZSE is soliciting opinions till 5 September 2021.
Relevant leadership of SZSE said that, since the implementation of the pilot project of the registration-based IPO system on the ChiNext Board, SZSE has further refined the market-based issuance and underwriting systems, and established the book building, pricing and placing mechanism of new stocks on the ChiNext Board with institutional investors as the mainstay. Those efforts have played a positive role, and resulted in the stable and orderly issuance of new stocks in general. However, some new situations and new problems also emerged in practices. To address those new situations and new problems, under the guidance of CSRC and adhering to the market-oriented and rule-of-law principle, SZSE studied and improved the Implementation Rules on IPO at times while strengthened the regulation of issuance and underwriting regularly, to proactively safeguard fairness and efficiency in the issuance and underwriting process of new stocks. The revision mainly involves three aspects. First, SZSE will refine the higher quotation removal mechanism, adjusting the removal proportion of higher quotation from no less than 10% to no more than 3%. Second, SZSE will consider the Special Provisions on the IPO Stock Issuance and Underwriting on the ChiNext Board, cancelling the requirement that the IPO issuance pricing shall be linked with the subscription schedules and the number of special notices on investment risks. Third, SZSE will strengthen regulation of book building and quotation by laying down the norms and requirements that offline investors shall follow in book building, and defining their acts of violation and regulatory measures. Those who are suspected of violating laws or CSRC’s regulations will be reported to CSRC or be investigated for criminal responsibility by judiciary authorities according to law.
Next, SZSE will continue to practice the principles of “system building, non-intervention, and zero tolerance” and the urges to revere the market, revere the rule of law, hold high professionalism, stay alert to risks, and obtain support from various parties across the board. Adhering to the working philosophy of being “open-minded, transparent, honest and impartial”, SZSE will carefully study and take consideration of reasonable advices from market players and further refine the Implementation Rules on IPO. Besides, SZSE will improve the issuance and underwriting mechanism on the ChiNext Board, build a more market-oriented issuance and pricing system, and strengthen regulation during the issuance and underwriting process. In addition, SZSE will also urge both buyers and sellers to earnestly fulfil their duties, quote independently and objectively and price in a prudent and reasonable manner, to jointly keep order of new stock issuance and give better play to the function of optimizing the allocation of factor resources.
