.jpg)
SZSE upheld and implemented comprehensive strict regulation according to law in 2017, issuing 103 disciplinary decisions and taking self-regulatory measures for 2282 times. Meanwhile, SZSE was also standardizing the regulatory procedures, trying to safeguard substantive justice with procedural justice. With the Self-disciplinary Regulation Hearing Procedure and Hearing Review Committee Working Procedure amended and released recently, SZSE has improved the hearing and review procedures for frontline regulation, a further step taken to govern the market by rule of law.
Taking firm and practical actions - expanding the scope of items for hearing review to guarantee relief and remedies
SZSE, as a frontline regulator, has always insisted on the integrity, compliance, transparency and justice of regulatory procedure. Hearing is one protection for market entities at the occurrence of an event while review is another after the event. At a hearing, the party concerned would be allowed to make a statement or argument before SZSE issues a regulatory decision, which would improve the transparency of decision making. After the party concerned receives the decision, it may apply for review on that regard. With the review procedure serving as remedy for the party concerned, regulation would continues to work its magic in the market.
As early as 2013, SZSE has introduced the hearing mechanism to its public denouncing of companies listed on the SME and ChiNext boards. The revision of relevant rules and procedures would further expand the items covered by hearing and review, offering new remedies to listed companies while implementing strict regulation.
As per the new procedures, hearing on delisting is added to expand the scope of hearings which only covered disciplinary hearing previously. Disciplinary hearing is now applicable to serious disciplinary cases such as decisions that a party is not suitable to serve as director, supervisor or senior executive in a listed company, all public censures, and cancellation of membership or qualifications of other transaction participants. Delisting hearing refers to hearing on review of compulsory stock delisting. Corresponding to hearing, the review procedure could now apply to public decisions that a party is not suitable to serve as director, supervisor or senior executive in a listed company and all public censures.
As of now, the dual-relief mechanism of hearing and review covers major disciplinary and delisting decisions which have significant impact on market entities, except that the hearing procedure is not yet applicable to disciplinary measures such as restriction on trading for timeliness reason. The expansion of hearing and review items provides the parties concerned with internal remedies to speak out or reason when their opinions diverged from those of relevant authorities, which not only protects the legitimate rights and interest of the parties concerned, but also enhance their recognition of regulatory work, help settle disputes, and further standardize the self-regulatory decisions of SZSE and improve public faith in it.
Embracing innovation – optimizing and standardizing regulatory procedure
An important element of law-based thinking and approach is procedure-based thinking and approach. In a sense, to rule by law is to rule by procedure. Another emphasis of the revision of procedures is to optimize the hearing and review procedures to ensure procedural justice.
First, strengthening the relevance between hearings and subsequent regulatory decisions. Those who make decisions are those involved in the hearings. This is a principal to be upheld. To be specific, the hearing committee shall participate in the subsequent regulatory decision-making to ensure that the opinions aired by the parties concerned during the hearings are fully considered. This is a reinstatement of the principle of the system – to do justice after full consideration of opinions.
Second, adjusting the requirement to continue implementation of decisions during review procedure. In principle, implementation of relevant decisions shall continue during the review procedure, but for some decisions which have great impact on market entities or and which may have irreversible results such as delisting decisions, the implementation may be suspended during review. The adjustment is a reflection of regulatory efficiency and prudence.
Third, detailing requirements on time limit for convening of meetings, withdrawal of applications or applications for extension, and making it explicit that the time spent on hearings shall not be included in the time limit for making relevant decisions. These revisions not only help clear market expectations but also help standardize the hearing and review work of SZSE.
Optimization of the hearing and review system and enabling regulators to perform their duties under “seeable justice”, are important measures taken by SZSE to implement the people-centered principle, and to standardize and regulate self-regulatory behaviors. Next, SZSE shall continue to uphold the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, deepen the practice of ruling the market by law, push forward the frontline regulation with more openness and transparency in a standardized and scientific manner, so as to fully safeguard the market players’ right to know, right to participate, right of self-expression and right of supervision, and to facilitate the stable and sound development of the capital market with more strict regulatory requirements and higher working standards.
