In order to thoroughly implement the spirit of the Central Financial Work Conference and the Several Opinions of the State Council on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Capital Market, we will further deepen the reform of the delisting system and achieve an orderly and timely settlement pattern. On the basis of conscientiously summarizing the reform experience and fully considering the national and market conditions, the China Securities Regulatory Commission formulated the Opinions on the Strict Implementation of the Delisting System (hereinafter referred to as the "Delisting Opinions").
The "Delisting Opinions" focus on improving the overall quality of existing listed companies, increasing the efforts to clear out "zombie shells" and "black sheep" through strict delisting standards, and reducing the value of "shell" resources;
Specifically, it includes the following aspects:
First, strict mandatory delisting criteria. The first is to strictly enforce the scope of application of major illegal delisting, lower the threshold for triggering major illegal delisting due to financial fraud within two years, and add new circumstances of serious fraud for one year and continuous fraud for many years. The second is to include the long-term non-resolution of capital occupation resulting in the "hollowing out" of assets, the non-standard opinions of continuous internal control for many years, and the disorderly struggle for control that leads to the inability of investors to obtain effective information of listed companies into the normative delisting situation, so as to strengthen the strong constraints on standardized operation. The third is to increase the operating income delisting index of loss-making companies and increase the delisting of companies with poor performance. Fourth, improve the market value standard and other trading delisting indicators.
Second, we will further unblock diversified delisting channels. Improve policies and regulations such as absorption and merger, and encourage and guide leading companies to increase the integration of the industrial chain based on their main business.
Third, reduce the value of "shell" resources. Strengthen the supervision of mergers and acquisitions, strengthen the relevance of the main business, and strengthen the supervision of "backdoor listing". Strengthen the supervision of acquisitions, consolidate the responsibilities of intermediaries, and standardize control transactions. Strictly crack down on violations of laws and regulations behind "shell frying". Resolutely liquidate listed companies that do not have reorganization value.
Fourth, strengthen the supervision of delisting. Strictly implement the delisting system, and severely crack down on financial fraud, insider trading, market manipulation and other violations of laws and regulations. Severely punish the "key minority" such as controlling shareholders, actual controllers, directors, and senior executives who lead to major illegal delisting. Promote and improve the three-dimensional accountability system for administrative, criminal and civil compensation.
Fifth, we will implement compensation relief for delisted investors. Comprehensive use of representative litigation, advance compensation, professional mediation and other tools to protect the legitimate rights and interests of investors.
In the next step, the China Securities Regulatory Commission will coordinate and promote the implementation of various measures as soon as possible, severely crack down on all kinds of evasion of delisting, protect the rights and interests of investors, improve the quality of listed companies, and purify the capital market ecology.
Opinions on the strict implementation of the delisting system
All dispatched agencies, exchanges, subordinate units, associations, and departments of the China Securities Regulatory Commission:
The delisting system is a key basic system in the capital market. Since the Central Deep Reform Commission deliberated and approved the "Implementation Plan for Improving the Delisting Mechanism of Listed Companies" in 2020, normalized delisting has started steadily. In order to further deepen the reform, realize the pattern of orderly advance and retreat, timely clearance, and greater protection of the legitimate rights and interests of small and medium-sized investors, the China Securities Regulatory Commission has formulated these Opinions on the basis of conscientiously summarizing the reform experience and fully considering the national and market conditions.
1. General requirements
Adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and adhere to the principles of marketization and rule of law:
——Highlight the investment value of listed companies. Combined with the listing conditions of enterprises, we will scientifically set strict delisting standards to more accurately achieve "all that should be withdrawn". Establish and improve the differentiated delisting standard system for listed companies in different sectors. Stricter securities regulatory law enforcement will be used to crack down on all kinds of illegal "shell protection" and "shell speculation" behaviors, and strive to reduce the value of "shell" resources.
-- Smooth diversified delisting channels. Strict standards for mandatory delisting of financial indicators, trading indicators, standardized operations, and major violations. Improve the mergers and acquisitions and restructuring policies of listed companies, such as mergers and acquisitions, and support the voluntary delisting of market-oriented methods.
– Vigorously strengthening investor protection. Adhere to the "retreat, retreat steadily". Strictly punish the illegal acts of the delisted company and its controlling shareholders, actual controllers, directors and senior executives, improve the investor compensation and relief mechanism in the process of delisting, effectively protect the legitimate rights and interests of investors, and build consensus among all parties to create a stable environment for delisting.
Second, the main measures
(1) Further tighten the criteria for compulsory delisting. The first is to scientifically set the scope of application for mandatory delisting for major violations. Increase the number of serious fraud for one year and delisting for many years, and resolutely crack down on vicious and long-term systemic financial fraud. The second is to strictly regulate the situation of delisting. Increase the circumstances of delisting from non-standard opinions on internal control for many consecutive years, and urge listed companies to effectively strengthen internal management and corporate governance; increase the delisting situation where investors are unable to obtain effective information about listed companies due to long-term disorderly struggle for control, and protect the right to know of small and medium-sized investors; The third is to increase the delisting of companies with poor performance. Raise the operating income delisting indicators of loss-making companies, eliminate companies that lack the ability to continue operations, and improve the market value standard and other trading delisting indicators.
(2) Gradually broaden diversified exit channels. The first is to take high-quality head companies as the "main force" to promote the absorption and merger of listed companies. The second is to take industrial mergers and acquisitions as the main line to support the implementation of market-oriented absorption and merger in the same industry and upstream and downstream between listed companies that are not under the same control. The third is to improve the policies related to absorption and merger, and break through the "blocking points" of cross-sector absorption and merger such as investor suitability requirements. Fourth, if a listed company voluntarily delists through a tender offer, a resolution of the general meeting of shareholders, etc., it shall provide special protection such as the cash option of dissenting shareholders.
(3) Vigorously reduce the value of "shell" resources. The first is to strengthen the supervision of restructuring, strengthen the relevance of the main business, strictly control the quality of injected assets, and prevent inefficient assets from being injected into listed companies; strictly supervise the restructuring and listing, strictly implement the requirements of "backdoor equivalent IPO", and strictly supervise the mergers and acquisitions of listed companies on the risk warning board (ST shares, *ST shares). The second is to strengthen the supervision of acquisitions, consolidate the responsibilities of intermediaries, strictly control the qualifications of acquirers and the sources of acquisition funds, and standardize control transactions. The third is to strictly crack down on market manipulation and insider trading behind the "shell speculation" and maintain trading order. Fourth, for companies that do not have reorganization value, they will be resolutely liquidated.
(4) Earnestly strengthen regulatory law enforcement efforts. The first is to strengthen the supervision of information disclosure and transaction monitoring, urge companies to disclose the risk of delisting as soon as possible, strengthen the supervision of illegal evasion of delisting, and resolutely delist when the delisting criteria are met, and optimize the mechanism for the detection and investigation of financial fraud of listed companies. The second is to consolidate the responsibilities of accounting firms, and take the audit opinions that reflect the financial distortion and internal control failure of listed companies as an important basis for delisting decisions; The third is to insist on "pursuing to the end" the violations of laws and regulations of the delisted company and its controlling shareholders, actual controllers, directors and senior executives, severely punish the responsible personnel who lead to the forced delisting of listed companies in major violations, and implement measures to prohibit entry into the securities market in accordance with the law. Promote and improve the three-dimensional accountability system for administrative, criminal and civil compensation.
(5) Stronger implementation of investor compensation relief. First, if the delisted company and its controlling shareholders, actual controllers, directors and senior executives violate laws and regulations and cause damage to investors, the securities investor protection agency shall guide investors to actively exercise their rights. Second, for the major illegal delisting of listed companies, it is necessary to promote the comprehensive use of methods such as support litigation, model judgments, professional mediation, representative litigation, and advance compensation to safeguard the legitimate rights and interests of investors. Third, the controlling shareholders, actual controllers, directors and senior executives who are responsible for the major illegal delisting shall compensate investors for their losses in accordance with the law.
3. Organization and implementation
Strengthen the supervision and management of the performance of duties by stock exchanges and securities regulatory bureaus. Stock exchanges should conscientiously assume the main responsibility for the implementation of delisting, conscientiously perform important duties such as delisting decision-making, information disclosure supervision, and transaction monitoring; speed up the revision of stock listing rules and related business rules, and promulgate and implement them as soon as possible. The CSRC shall carry out supervision and management of the information disclosure and corporate governance activities of listed companies in accordance with the law, investigate and deal with violations of laws and regulations in the process of delisting in accordance with the law, and cooperate with local governments to do a good job in maintaining territorial stability.
(CCTV reporter Dong Bin Shaqian)
Source: CCTV news client
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