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As a major decision and arrangement made by the Central Committee of the Communist Party of China (CPC) and the State Council, fully implementing the stock issuance registration system has far-reaching implications for improving the function of the capital market, increasing the proportion of direct financing and promoting high-quality economic development. Under the unified leadership of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) adheres to the general principle of pursuing progress while ensuring stability. On the basis of summarizing and evaluating the reform practice of the registration system pilot on STAR Market, it has made sound preparations for fully implementing the stock issuance registration system. Today, the SSE solicits public opinions to the market on nine supporting business rules it has formulated and revised. Relevant officials of SSE met the press on the
I. Please introduce the general idea of formulating and revising the supporting business rules for fully implementing the registration system on the SSE.
A: The supporting business rules for fully implementing the registration system on the SSE are formulated in accordance with the provisions of the Securities Law, the general requirements of fully implementing the registration system and the regulations of the CSRC, which together constitute a holistic and complementary institutional arrangement to ensure the implementation of reform. The SSE abided by the following ideas during the formulation.
First, firmly implementing the reform direction and goals. This includes thoroughly studying and implementing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the 20th CPC National Congress, implementing the decisions and arrangements of the CPC Central Committee and the State Council, following the coordination and arrangement of the CSRC, focusing closely on the overall goal of building a "standardized, transparent, open, dynamic and resilient capital market", adhering to the reform direction of marketization and rule of law, respecting the basic connotation of the registration system, drawing on the best global practices, adhering to the principle of reflecting Chinese characteristics and development stage, highlighting the essence of the registration system reform, that is, to leave the choice to the market, sticking to serving the real economy and sci-tech innovation, and better promoting high-quality development.
Second, fully inheriting the reform experience of registration system pilot. Fully implementing the registration system is further promoted based on the summary and evaluation of the reform experience of the registration system pilot on STAR Market and ChiNext. The exploration of the pilot of registration system formed a registration system framework in line with China's national conditions, established an open, transparent and predictable review and registration mechanism, promoted key institutional innovation, facilitated supervision transformation, and improved the integrity and risk prevention mechanism. By formulating the supporting business rules for fully implementing the registration system, the SSE attempts to replicate and promote the systems to the Main Board that have withstood market test and been proven to be effective in the pilot registration system. This is expected to further promote open-door review, improve transparency, enhance market discipline, and raise market quality and efficiency.
Third, arranging and promoting all boards as a whole. As the stock issuance registration system moves from pilot reform to full implementation, the unified arrangements for registration system have been fully implemented across boards. The supporting business rules comprehensively cover issuance and listing review, issuance and underwriting, continuous supervision, trading and investor protection, taking into account both the markets of the Main Board and STAR Market. The basic system of registration system as a whole applies to all boards.
Fourth, making differentiated arrangements to reserve characteristics of boards. In view of the functional positioning of boards, the SSE set up diversified and inclusive listing conditions to highlight the characteristics of boards and maintain staggered development; it respected the customs of Main Board market, kept the suitability requirements for Main Board investors unchanged, steadily advanced reform of the Main Board trading mechanism and constantly evaluated and improved it; it continued to play the role of ChiNext as a "pilot zone" to launch pilots and accumulate experience in such fields of co-investment by sponsor institutions, inquiry transfer for share-holding reduction, and market-making mechanism.
II. The SSE has solicited public opinions on nine rules. Please brief us these business rules.
A: The supporting business rules are part of the overall institutional arrangement of fully implementing the registration system. According to the overall requirements of reform and the regulations of CSRC, based on the supporting rules of registration system pilot on STAR Market, the SSE made extensive and adaptive modifications and improvements, and integrated and optimized the rules system synchronously. The nine business rules for soliciting opinions from the market mainly involve four aspects.
First, the offering of rules related to listing review. Based on the STAR Market's offering of rules related to listing review, the SSE formulated the Rules Governing the Review of Offering and Listing of Stocks on Shanghai Stock Exchange, the Rules Governing the Review of Offering and Listing of Securities by Listed Companies on Shanghai Stock Exchange, and the Rules Governing the Review of Major Assets Reorganization of Listed Companies on Shanghai Stock Exchange. They extend the STAR Market's review procedures, mechanisms and information disclosure requirements for IPOs, refinancing, M&A and reorganization to the Main Board and makes improvement. In accordance with amendments to the CSRC regulations on preferred stock, the SSE Detailed Rules for Implementation of Preferred Stock Pilot were revised and formed. Also, the series of applicable guidelines and guidance accompanying the rules governing the review of offering and listing will be revised together to apply to both boards.
Second, the offering of rules related to underwriting. The SSE replicated and promoted the STAR Market's market-oriented offering and underwriting system to the Main Board and improved it. The Implementation Measures for the Initial Public Offering and Underwriting of Stocks on Shanghai Stock Exchange were formulated to apply to the offering and underwriting of stock on the Main Board and the STAR Market. The rules system was integrated and optimized simultaneously. The offering and underwriting practices and applicable guidelines previously applicable to the STAR Market were integrated into the aforementioned rules. Besides, the SSE will revise the detailed rules for implementation of listed companies' securities issuance and underwriting and the two detailed operation rules for online and offline offering, so as to optimize the process arrangement for offering and underwriting.
Third, rules related to continuous supervision of listed companies. In early 2022, the SSE revised the Rules Governing the Listing of Stocks on Shanghai Stock Exchange. Fully drawing on the reform experience of registration system pilot in information disclosure, continuous supervision and delisting, it ensured that relevant institutional arrangements meet the needs of fully implementing the registration system. In response to the reform requirements, the SSE set up diversified and inclusive listing conditions, replicated the differential voting structure and continuous supervision of red chip enterprises in the STAR Market's listing rules, improved information disclosure requirements and encouraged the adoption of diverse resolution mechanisms involving group disputes. After the reform, the Main Board and the STAR Market still apply separate stock listing rules respectively, but the main institutional arrangements except listing conditions have been unified.
Fourth, rules related to organization and management of trading. The SSE revised the Trading Rules of Shanghai Stock Exchange as a whole, improved the trading system of the Main Board, integrated the special regulations and supporting guidelines for stock trading on the STAR Market, and optimized the system of trading rules; Since the rules for bond trading have been separately formulated and issued previously, the content of bond trading was removed this time; The Implementation Rules of Shanghai Stock Exchange on Securities Margin Trading and the Implementation Measures of Shanghai Stock Exchange on Securities Refinancing Lending Transactions were amended to clarify that new stocks can be included in the eligible stocks for securities margin trading on the first day of listing, but cannot carry out pledged quotation repurchase and agreed on repurchase for the time being.
III. How will the SSE Main Board and the STAR Market position themselves in full implementation of the registration system?
A: The Main Board reform is the top priority of fully implementing the registration system. The SSE will effectively undertake the main responsibility of implementing the registration system reform, clarify the Main Board's positioning and optimize its offering and listing conditions; it will stick to the STAR Market's positioning, promote the formation of a multi-tiered market system of staggered development, function complementation and organic linkage, and substantially serve the development of the real economy.
First, further clarifying the Main Board's positioning. After years of development, the SSE Main Board has brought together a large number of backbone enterprises and industry-leading enterprises related to the national economy and people's livelihood, which has won it full market recognition. In the context of fully implementing the registration system, the Main Board has been positioned to highlight the large-cap blue-chip characteristics of the market, mainly supporting high-quality enterprises with mature business models, stable operating performance, large scale and representative of the industry. At the same time, further optimizing listing conditions of the Main Board. After the reform, the Main Board and other boards are interconnected. Corresponding transitional arrangements are also made to avoid substantial effect on Main Board enterprises under review and those to be declared. The SSE will constantly adhere to the Main Board's positioning, promote the listing of large-cap blue-chip enterprises and industry-leading enterprises on the Main Board, and leverage its role as a "barometer" of the national economy.
Second, adhering to the STAR Market's positioning. The STAR Market has developed a clear evaluation system for the sci-tech innovation attributes which as been optimized dynamically. There has been a market's general consensus for "key and core technology" enterprises to list on the STAR Market. After fully implementing the registration system, the SSE will further adhere to the STAR Market's positioning, focus on its core goal of "supporting and encouraging the listing of 'key and core technology' enterprises", and be dedicated to serving "key and core technologies". During this process, the SSE will further support companies that meet the STAR Market's positioning to be listed on the board on a priority basis.
IV. In this reform, what improvement and optimization have been made to the SSE’s review system of offering and listing?
A: According to the requirement of fully implementing the registration system, on the basis of standardization, transparency, predictability and strict quality control, the SSE replicated and promoted the STAR Market's procedures, mechanisms and information disclosure requirements for offering and listing review to the Main Board. Based on this, the SSE optimized specific arrangements for offering and listing review, formulated the review rules for IPOs, refinancing and major asset reorganization, and developed supporting business guidelines and guidance for implementation on both Main Board and the STAR Market. The review system of offering and listing has been optimized in the following aspects:
First, unifying the review system and optimizing the registration procedure. The SSE clearly defined the content, approaches, procedures, responsibilities of all parties and self-regulatory measures for IPOs, refinancing, M&A and reorganization, so as to apply a unified review and registration system on the Main Board and the STAR Market. In terms of IPO review, the SSE further clarified the positioning of the Main Board and the STAR Market, strengthened the organic connection between Exchange review and CSRC registration, and improved the review quality and efficiency. The SSE would accept companies' applications for public stock offerings, review and judge whether they meet the requirements for offering, listing and information disclosure. If major sensitive matters, major unprecedented situations, major public opinions or major illegal clues were found in review, the SSE would promptly request and report to the CSRC. In terms of refinancing review, it included preferred stock in the scope of review under the registration system, expanded the scope of issuer to STAR Market listed companies, expanded the classification review system to STAR Market listed companies, and extended the scope of application for issuing stocks to specific objects by summary procedure to Main Board listed companies. In this way, the standards of the Main Board and the STAR Market can be unified and listed companies can be guided to focus on their main businesses in line with their board's positioning. In terms of reorganization review, it added new conditions for restructuring listed eligible assets on the Main Board, optimized the "track separation" review mechanism on the Main Board and extended it to the STAR Market, and retained the current differentiated institutional arrangement of " small quota fast-track" for the Main Board and the STAR Market.
Second, further improving the requirements for information disclosure. According to requirements of the Securities Law and the CSRC's Guidance on Improving Quality of Information Disclosure in Prospectuses under the Registration System, taking into account the review and supervision practice, the SSE further improved the registration system arrangement with information disclosure as its core. In the review rules, it added new information disclosure requirements such as "concise and clear, easy to understand" and "improve the pertinence, effectiveness and readability of information disclosure", to improve the quality of information disclosure in prospectuses and enhance their readability.
Third, strictly defining the responsibilities of issuers and intermediaries. The regulation of "responsibility upon acceptance" for releasing and listing application documents was adjusted to "responsibility upon declaration" to further hold issuers and intermediaries responsible and guide all market entities to do their part. The responsibilities of intermediaries were further clarified. The requirement of "comprehensive verification and validation" of releasing and listing application documents for sponsors was adjusted to "prudential verification". Moreover, the SSE summarized the on-site supervision system that had worked well in practice, expanded the scope of supervision from sponsors to relevant securities service providers, and clarified their obligations to cooperate. To urge issuers and intermediaries to better fulfill their responsibilities, the SSE further set forth in the review rules the routine work in the review process.
Fourth, optimizing services to enhance review transparency. Adhering to the principle of "open-door review", the SSE improved relevant regulations on consultation and communication, expanded the scope of business consultation and communication from IPOs on the STAR Market to IPOs, refinancing, M&A and reorganization on the Main Board and the STAR Market, and clarified the consultation and communication items before declarations, during review and after consideration by the Listing Committee, thus responding to market concerns and further improving the openness and transparency of review.
V. In this reform, what are institutional arrangements for the Listing Review Committee and the M&A and Reorganization Review Committee?
A. On December 23, 2022, the SSE issued and implemented the Measures for the Administration of the Listing Review Committee and the Review Committee of M&A and Restructuring of Shanghai Stock Exchange, which is applicable to boards implementing the registration system and is an important part of the supporting business rules for the SSE to fully implement the registration system. According to the Measures above, the newly formed First Listing Review Committee and the First M&A and Reorganization Review Committee of the SSE will officially assume their duties soon. The institutional arrangements for the two Committees reflect the following three requirements.
First, building a team of professionals, experts and full-time members. The Listing Review Committee and the M&A and Reorganization Review Committee will handle applications for listing and delisting of securities in boards that apply the registration system, and consider applications by listed companies to purchase assets by offering stocks (including convertible corporate bonds and other securities), etc. The role of independent performance and professional gate-keeping of two Committees’ members will be enhanced, so as to strengthen checks and balances between review mechanisms. The selecting will focus on members’ professional competence and mainly choose full-time members and those with experience in securities regulation.
Second, optimizing the operation and management of the Listing Review Committee and the M&A and Reorganization Review Committee. The SSE will further improve the whole chain mechanism of "selection, appointment and management" for members, formulate detailed rules for the review of the two Committees and management of members, specify the whole process of members to fulfill their duties, strengthen performance assessment, and optimize communication and consultation mechanisms to ensure their standard, efficient and smooth operation.
Third, highlighting the integrity requirements for the Listing Review Committee and the M&A and Reorganization Review Committee. The SSE will enhance members' political consciousness and reverence for public authority and rules to build a loyal, professional and pragmatic team. It will formulate detailed rules for supervision and management of the two Committees, strengthen the management of members' compliance pledge, stock and other investment activities, integrity reporting, prohibition of seeking commercial interests, avoidance, etc., to effectively prevent relevant integrity risks.
VI. What are the main amendments to the business rules for preferred stock?
A: While maintaining the stability of the original institutional arrangement as far as possible, this amendment to the Detailed Implementation Rules for Preferred Stock Pilot Business focuses on the transition with the registration system, so as to improve the inclusiveness of the system and facilitate companies on different boards to use preferred stock for financing.
First, providing institutional support for STAR Market companies to issue preferred stock. The SSE included the STAR Market in the scope of application, enriched the refinancing tools for STAR Market companies, and provided rules support for the issuance, listing and trading, transfer and continuous supervision of preferred stock of STAR Market listed companies.
Second, properly transition between preferred stock offering review and offering and underwriting system under the registration system. The SSE made transition arrangements and adaptive adjustments for implementing the registration system for preferred stock, specifying that the application, review and offering of preferred stock by listed companies are subject to the rules of the SSE on offering and listing review and offering and underwriting. Besides, the regulations on signing listing agreement and transfer service agreement were removed and related listing and the transfer process was simplified.
Third, optimizing the trading and suspension and resumption arrangements for preferred stock. The SSE made it clear that the trading of listed preferred stock generally refers to and applies the provisions of Trading Rules on trading of common stock, and made special arrangements for some trading mechanisms, such as clarifying that provisions on severe abnormal fluctuations do not apply to preferred stock. The suspension and resumption system for preferred stock was optimized to make it clear that preferred stock is applicable to the suspension and resumption provisions of stocks and their derivatives in the Rules for Listing of Stocks.
VII. The market-based offering and underwriting system is an important part of fully implementing the registration system. What optimizations have the SSE made to its offering and underwriting rules?
A: This reform of the offering and underwriting system is oriented towards marketization and rule of law, fully drawing on the experience of the registration system pilot on the STAR Market and ChiNext. The SSE set no restrictions on the pricing and size of the Main Board stock offering, and further improved the inquiry, pricing and allotment mechanism with institutional investors as the main participants. Also, it strengthened market constraints and integrated and formed the Detailed Implementing Rules for Issuance and Underwriting of Initial Public Offering of Securities applicable to both the Main Board and the STAR Market.
First, improving the pricing mechanism for new stock. The Main Board and the STAR Market are allowed to adopt direct pricing. Under inquiry pricing, futures companies are added as the inquiry objects, clarifying that the Main Board should make inquiries to individuals, other legal persons and organizations while doing this to professional institutional investors, which is basically in line with the pre-reform practice. The offline investors can fill in three different proposed subscription prices, thus adjusting the ratio of the high price elimination mechanism and improving the requirements for pricing information disclosure. The SSE introduced offline offering restriction arrangements, allowed the adoption of lottery restriction or proportional restriction, and guided investors to bid prudently. Besides, it drew on the previous experience of large-cap stock offerings and made it clear that for projects with an issue size of more than 10 billion yuan, the ratio of offline restricted allotment object accounts or the number of securities allocated to them should be no less than 70%.
Second, optimizing and adjusting the allotment mechanism. The SSE did not implement the sponsor co-investment system on the Main Board and maintained the STAR Market's current co-investment mechanism. It unified the new stock subscription units of the Main Board and the STAR Market, enhancing the new share inclusion for online investors. It maintained the existing differentiated initial issuance ratio and claw-back mechanism arrangements for the Main Board and the STAR Market, with the former favoring online investors. It optimized the specific implementation arrangements for strategic placement, eliminated the brokerage commissions for new stock placements of the STAR Market, and improved the green shoe option mechanism to promote share price stability after the listing of new stock.
Apart from this, relevant rules clearly extend responsibilities of the Self-Regulation Committee for Stock Public Offering to the Main Board to provide advice and play an industrial self-regulation role.
VIII. What are the new changes to the continuous supervision system in the Main Board's Rules for Listing of Stocks?
A: In order to fully implement the registration system in a smooth manner, the Main Board's Rules for Listing of Stocks have been amended mainly for two goals. On the one hand, enhancing the institutional inclusiveness of the Main Board to better serve all types of listed enterprises under the registration system. On the other hand, improving the pertinence and effectiveness of information disclosure rules to further refine the rule system of continuous supervision. With this in mind, while maintaining overall stability, the Main Board's Rules for Listing of Stocks was adapted to meet the requirements of the registration system reform. Based on the STAR Market's pilot experience, major institutional arrangements such as red chips and differential voting rights were added, relevant information disclosure systems were improved, and unified and open supervision standards were formed.
First, optimizing the Main Board listing conditions. According to the Securities Law, the SSE streamlined the conditions for public offerings on the Main Board, optimized the listing standards for profitability, eliminated the requirement of no uncovered losses at the end of the most recent period, and the restriction on the ratio of intangible assets to net assets. Taking into account expected market value, net profit, revenue, cash flow and other factors, the SSE set up several diversified and inclusive listing indicators such as "sustained profitability", "expected market value + revenue + cash flow", and "expected market value + revenue", which further optimized the threshold for enterprises to be listed on the Main Board. Moreover, it made adaptive adjustments to the re-listing conditions, which are generally consistent with the IPO listing standards.
Second, clarifying the listing and continuous supervision requirements for red-chip enterprises. The SSE consolidated the specific standards for red-chip enterprises to issue stocks or depositary receipts and list on the Main Board, and replicated the clear standard for red-chip enterprises to list on the STAR Market to the Main Board. Red-chip enterprises that meet the innovation pilot policy can apply the "market value + revenue" standard. The section "Coordination of Red-Chip Enterprises and Domestic and Foreign Matters" in Chapter 11 was specially set to integrate important provisions on the continuous supervision of red-chip enterprises, and clarified that the continuous information disclosure of listed red-chip enterprises should refer to and apply relevant provisions of SSE's innovation pilot rules.
Third, providing for supervision arrangements of differential voting rights. The SSE set the conditions for companies adopting the differential voting right structure to apply for listing on the Main Board. Based on the basic requirement for listing on the Main Board, i.e. positive net profit, it added the standard for positive net profit different from that of the STAR Market. The section in Chapter 4 "Corporate Governance" was specially set to stipulate that while respecting the choice of corporate governance practices of enterprises, it will regulate the differential arrangement of voting rights, and clarify the qualifications of subjects with special voting rights and requirements for subsequent changes. This protects the rights of shareholders with common voting rights and strengthens internal and external supervision mechanisms.
Fourth, optimizing the information disclosure system. The SSE added a new requirement for penetrating disclosure by contractual funds, trust plans or asset management plans when they are the controlling shareholder or the largest shareholder, and stipulated the disclosure obligations of special asset management plans with senior executives' participation when they reduce their holdings of strategic placement shares; it strengthened the information disclosure and risk alert for stocks with severe abnormal fluctuations, and clarified the verification, public disclosure, suspension and resumption of trading requirements for companies and relevant information disclosure obligors. For media reports and rumors appearing after the disclosure of prospectus intent letter or prospectus, if they may have a significant impact on the company's stock and its derivatives trading prices or investment decisions, the company should publish a risk alert announcement on the first day of listing to clarify and remind the risk.
IX. The Main Board is a large market with many investors. What improvements have been made to the trading mechanism of the Main Board when fully implementing the registration system?
A: Based on the main characteristics of the current Main Board market and investors, this revision of the Trading Rules drew on the trading mechanism of the STAR Market. The Main Board trading mechanism was optimized and improved to enhance market orientation and convenience, maintain reasonable liquidity, improve pricing efficiency, and increase the inherent stability of the market.
First, optimizing the rules system. In order to establish a more concise and friendly rule system, this amendment removed relevant provisions on bond trading, and integrated the Main Board and the STAR Market's trading rules on stocks, funds, depositary receipts, etc.
Second, borrowing some trading mechanisms of the STAR Market. First, the SSE replicated the initial trading mechanism for new stocks, clarified that there is no limit down and up for price in the first five trading days after the listing of IPO stocks on the Main Board, and adjusted the intraday temporary suspension mechanism to a 10-minute trading halt if the intraday trading price rises or falls by 30% and 60% for the first time compared to the opening price of the day. Second, the SSE replicated the 2% effective range of order prices in the continuous trading stage, and provided to take 0.1 yuan when the effective price range of 2% changes from the benchmark price by less than 10 minimum change units (0.1 yuan). Third, the SSE replicated the two types of market price orders: same-side best price order and counter-party's best price order, clarifying that market price order can be used for securities without down and up price limit, and replicating the protective price limit of market price order. Fourth, the SSE added the disclosure of trading information on severe abnormal fluctuations, and adjusted corresponding thresholds according to the characteristics of Main Board stocks.
Third, improving trading supervision. The SSE improved regulations on the supervision of abnormal trading behaviors and clarified the reporting obligations for program trading.
X. What are the specific arrangements for securities margin trading in this reform?
A: In order to improve the efficiency of market pricing, the Implementation Rules for Securities Margin Trading was also revised this time, mainly from the following four aspects:
First, the SSE studied the reform experience of the STAR Market, clarifying that stocks are included as securities margin trading target on the first day of listing under the registration system, and stocks under the registration system should be included for securities margin trading from the date when the risk warning is removed. Second, apply the rules on securities margin trading to depositary receipts. Third, the SSE optimized the investment range of investors' proceeds from stock borrowing, and added bond exchange-traded funds as investable products (except those that track indices whose component bonds include convertible corporate bonds). Fourth, the SSE made adaptive adjustments for the size of order for margin trading of bonds and STAR Market stocks in accordance with relevant rules.
XI. What are the specific arrangements for refinancing securities lending business in this reform?
A: In order to further improve the balance between long and short positions of the market, the SSE revised the Implementation Measures on Refinancing Securities Lending Transactions, mainly from the following three aspects: First, expanding the source of securities refinancing lending, allowing strategic investors under the registration system to participate in securities lending transactions with shares acquired through allotments and held for the duration of their commitments. Second, implementing a market-based agreement declaration mechanism and introducing a market-oriented lending rate and lending term determination mechanism to better meet the diversified needs of market entities. Besides, improving the efficiency of agreement declaration to ensure that lenders and borrowers of securities refinancing can lend or borrow securities in real time. Third, optimizing arrangements for the declaration time and quantity for securities refinancing lending. Adjusting the declaration time for lenders to 9:15-11:30 and 13:00-15:00 on each trading day, and adjusting the declaration time for borrowers to 9:15-11:30 and 13:00-15:10. Reducing the minimum number of shares to be declared from "not less than 10,000 shares" to "not less than 1,000 shares" to better meet the needs of market participants.
XII. How does the SSE conduct integrity construction to fully implement the registration system?
A: Strengthening integrity construction is an integral part and an important guarantee for fully implementing registration system. The SSE consciously accepts the supervision and inspection of its review by the CSRC, and voluntarily accepts the "proximity" supervision by the Discipline Inspection and Supervision Group of the CSRC. The SSE attaches great importance to the construction of the integrity system. Since piloting the registration system on the STAR Market, it has consistently deployed and implemented the integrity system construction and business operation, and continuously strengthened the integrity supervision of fully implementing the registration system.
First, fully assessing the integrity construction and supervision of the registration system piloted on the STAR Market. The SSE comprehensively reviewed and evaluated the integrity system, adhered to a problem- and goal-oriented approach, analyzed and judged the new changes and new features of the Exchange's power operation after fully implementing the registration system, and thoroughly investigated the integrity risks. It strengthened integrity supervision, embedded supervision requirements into the whole process of the registration system reform, improved the embedded supervision of issuance review, strictly managed reviewers and members of the "two committees", upheld the keynote of strictness in the long run, and implemented "zero tolerance" for corruption in the capital market.
Second, further improving the integrity system. On the basis of piloting the integrity system of registration system on the STAR Market, the SSE consolidated and improved the effective practices, established and improved a whole-chain supervision and restriction mechanism for issuance review based on the new situation and new requirements of integrity construction; it formulated and revised six special systems for integrity supervision, including supervision of major issuance and listing review items, investment management, risk prevention and control of integrity in review, formulated, revised and improved internal management systems such as committee member management and complaint reporting. By embedding integrity and internal control requirements into business systems, work processes and technical systems, it constituted an integrity system with embedded supervision work plans, six special systems for integrity supervision and more than ten internal management systems. Also, the SSE implemented the requirement to "investigate both sides of bribery together", toughened punishment for bribery in the capital market, and resolutely cut off the "hand of hunting".
Third, strengthening social supervision. Adhering to the principle of openness and transparency, the SSE deeply promoted "open-door review", further improved the transparency of the whole review process, comprehensively promoted the openness of systems and rules, standards and contents, processes and procedures, as well as the process and results, and exposed the public power to social supervision.
Fourth, strengthening supervision and accountability. Emphasizing discipline, the SSE implemented the CSRC's "Ten No's" on work conduct, effectively forming a culture and atmosphere of strictness. It constantly improved the restriction and supervision mechanism for the operation of issuance and listing review power, strengthened the management and supervision of key personnel, key positions and key links, and seriously held accountable violations of laws and regulations to ensure the effective implementation of the registration system reform.
XIII. What are the follow-up arrangements of the SSE?
A: During the collection of public opinions on the rules, the SSE will listen to the opinions and suggestions of market entities, including small and medium investors, in a variety of ways, and fully demonstrate and absorb feedback from all parties. Upon approval by the CSRC, the revised supporting rules will be released to the market and implemented in a timely manner.
At present, under the unified deployment of the CSRC, the SSE has set up a leading group for the implementation of the registration system to fulfill the SSE Party Committee's major responsibility of reform. First, practicing the "two upholds". The SSE will deeply understand and recognize the original aspiration and mission of the registration system reform, fully, accurately and comprehensively implement the new development concept and integrate it into all aspects of the reform process. Second, implementing strict quality control for entry. The SSE will adhere to the information disclosure as its core, properly make arrangements for the review of enterprises already in the process and the acceptance and review of new applicant enterprises, and thus guard the "entry barrier" for the reform. Third, proceeding steadily and prudently. The SSE will follow the general requirements of "three stables and three progresses", fully consider the structure of SSE Main Board investors and listed companies, respect market rules, and maintain the stability and continuity of rules. Fourth, making good technical and personnel preparations. The SSE is moving forward with key work such as investigation of pipeline enterprises, risk prevention and control and investor education in an orderly manner.
Under the leadership of the CSRC, the SSE will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, improve its political stance, stick to the position of regulation for the people, adhere to the principle of "building the system, non-intervention, and zero tolerance", follow the requirements for "standing in awe of the market, the rule of law, expertise and investors, and forging synergy in comprehensive support for reform, development and stability of the capital market", scientifically grasp the relationship between stability and development, take the full implementation of the registration system as the pivot project, implement the spirit of the 20th CPC National Congress in its actions, uphold fundamental principles and break new ground, and promote the new journey of building a modern capital market with Chinese characteristics.
