The Shanghai Stock Exchange and the Shenzhen Stock Exchange answer questions from reporters

CFIC Introduction

The Shanghai Stock Exchange answered questions from reporters on nine business rules, including the official release of the "Rules for the Review of Stock Issuance and Listing".

According to the Shanghai Stock Exchange on April 30, 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" (hereinafter referred to as the new "National Nine Articles"), in accordance with the unified deployment of the China Securities Regulatory Commission, on April 30, 2024, the Shanghai Stock Exchange officially issued 9 supporting business rules including the "Stock Issuance and Listing Review Rules". The relevant person in charge of the Shanghai Stock Exchange answered reporters' questions on the formulation and revision of the rules.

1. Please introduce the overall situation of the business rules released this time.

Answer: The Shanghai Stock Exchange has issued 9 business rules in this amendment, including 5 major business rules such as the "Stock Issuance and Listing Review Rules", which has been publicly solicited for comments, as well as 4 supporting business rules and guidelines. Specifically, there are three categories: first, there are 6 issuance and listing review rules, namely the "Stock Issuance and Listing Review Rules", "Material Asset Restructuring Review Rules", "Administrative Measures for the Listing Review Committee and the M&A and Reorganization Review Committee", "Interim Provisions on the Application and Recommendation of Issuance and Listing of Enterprises on the Science and Technology Innovation Board", as well as the "Guidelines for the Acceptance of Application Documents" and "Guidelines for On-site Supervision". The second is one issuance and underwriting rule, namely the Guidelines for Matters of Concern in Investment Value Research Reports. The third is two continuous regulatory rules, namely the Main Board and the Stock Listing Rules of the Science and Technology Innovation Board.

In addition, the Shanghai Stock Exchange is formulating and revising other business rules for the implementation of the new "China Nine Articles", which will be released to the market as soon as possible.

2. In the early stage, the Shanghai Stock Exchange solicited opinions from the public on the "Rules for the Review of Stock Issuance and Listing" and other business rules. Please give us a brief overview of the situation.

A: From April 12 to April 19, 2024, the Shanghai Stock Exchange will solicit opinions on business rules from the market through channels and methods such as its official website, email, and symposiums.

On the whole, all parties in the market have given positive comments on the implementation of the spirit of the Central Financial Work Conference and the new "Nine Articles" and the stepping up of the improvement of various systems and rules. It is generally believed that the revision of relevant systems and rules embodies the main line of strengthening supervision, preventing risks, and promoting high-quality development, responds to the issues that the market is more concerned about, and further clarifies market expectations;

During the consultation period, the SSE received more than 100 opinions and suggestions from various market entities. The Shanghai Stock Exchange attaches great importance to it, carefully studies them one by one, and adopts nearly 40 opinions and suggestions, mainly involving improving the responsibilities of issuers and shareholders, strengthening the self-discipline supervision of issuance and listing review, refining the verification methods of intermediaries, strengthening the risk warning of listed companies for delisting, and comprehensively considering the company's business development needs to set dividend indicators. Where there is a large controversy or disagreement on the opinions of market entities, further research and demonstration will be conducted. For other opinions and suggestions, we will increase training and publicity in the future, do a good job in explaining the rules, and do a good job in the implementation of the rules.

3. What are the considerations for the revision of the Interim Provisions on the Application and Recommendation of the Issuance and Listing of Enterprises on the Science and Technology Innovation Board?

Answer: In order to better support and encourage "hard technology" enterprises to issue and list on the Science and Technology Innovation Board, strengthen the requirements for scientific and technological innovation attributes, and further highlight the "hard technology" characteristics of the Science and Technology Innovation Board, the China Securities Regulatory Commission has recently revised the "Guidelines for the Evaluation of Science and Technology Innovation Attributes (Trial)", and the Shanghai Stock Exchange has simultaneously revised the "Interim Provisions on the Application and Recommendation of Issuance and Listing of Enterprises on the Science and Technology Innovation Board".

The first is to improve the evaluation criteria for the scientific and technological innovation attributes of the Science and Technology Innovation Board, and strengthen the key indicators for measuring scientific research investment, scientific research achievements and growth. The "amount of R&D investment in the last three years" was adjusted from "more than 60 million yuan cumulatively" to "more than 80 million yuan cumulatively", "more than 5 invention patents applied to the company's main business" was adjusted to "more than 7 invention patents applied to the company's main business and can be industrialized", and "the compound growth rate of operating income in the last three years" was adjusted from "reaching 20%" to "reaching 25%". In the exception clause, "the formation of core technologies and the total number of invention patents (including national defense patents) applied to the main business of more than 50 items" simultaneously add the requirement that invention patents "can be industrialized".

The second is to focus on the need to promote scientific and technological innovation and consolidate the recommendation responsibility of sponsors. It is required that the sponsor institution should comply with the national strategy and industrial policy guidance, based on promoting the development of new quality productivity, implement the concept of high-quality development, accurately grasp the positioning of the science and technology innovation board, and recommend "hard technology" enterprises with key core technologies, outstanding scientific and technological innovation capabilities, outstanding scientific research achievements transformation and application capabilities, outstanding industry status or high market recognition, and strong growth potential to apply for the science and technology innovation board.

4. What are the revisions to the Guidelines for the Acceptance of Application Documents?

Answer: The new "National Nine Articles" clearly point out that pre-listing surprise "clearance" dividends and other situations will be included in the negative list for issuance and listing, and the Shanghai Stock Exchange has revised the Guidelines for the Application of Issuance and Listing Review Rules No. 1 - Acceptance of Application Documents, adding a new negative list for issuance and listing, and clarifying the requirements for relevant application documents. The sponsor shall issue a special verification opinion on whether the issuer and its actual controllers, directors, supervisors and senior executives have a material negative reputation of word-of-mouth, and whether the issuer has a surprise "liquidation" of dividends, and other matters, and include the verification opinions in the scope of the application documents.

The criteria for the above-mentioned "surprise 'clearance' dividends" are: the cumulative dividend amount in the three years of the reporting period accounts for more than 80% of the net profit in the same period, or the cumulative dividend amount in the reporting period exceeds 50% of the net profit in the same period and the cumulative dividend amount exceeds 300 million yuan, and the total proportion of the replenishment and loan repayment in the raised funds is higher than 20%.

5. In order to further consolidate the "gatekeeper" responsibilities of intermediaries, what arrangements have been made in the revised "On-site Supervision Guidelines"?

Answer: As an extension and supplement of the written review of issuance and listing, on-site supervision has played an important role in consolidating the verification and gatekeeping responsibilities of sponsors and securities service institutions, and improving the quality of listed companies from the source. In order to further implement the principle of "declaration is responsibility" and urge intermediaries to be diligent and responsible, the SSE has revised the Guidelines for the Application of the Issuance and Listing Review Rules No. 3 - On-site Supervision, focusing on the following three aspects.

The first is to clarify the principle of "one supervision to the end". In order to strengthen the warning and deterrence of strict supervision, it is clarified that the withdrawal of the application by the issuer or the withdrawal of sponsorship by the sponsor will not affect the implementation of the supervision work, nor will it affect the firm's handling of the problems found in the supervision in accordance with regulations.

The second is to broaden the coverage of on-site supervision. Increase the on-site supervision method of "random selection", and randomly select accepted projects according to the results of the quality-oriented practice quality evaluation of the sponsor institution, and initiate on-site supervision of the sponsor. It is clarified that if a matter that has a significant impact on whether the issuer meets the issuance conditions, listing conditions or information disclosure requirements occurs after the deliberation of the listing review committee meeting and before the listing and trading of shares or depositary receipts, the firm may initiate on-site supervision as necessary.

The third is to strengthen self-discipline and supervision in on-site supervision. Strengthen the self-discipline and punishment of non-compliant intermediaries and practitioners, urge them to better perform their verification and gatekeeping responsibilities, clarify the circumstances of heavier punishment, and emphasize that if sponsors, securities service institutions and their relevant personnel refuse, obstruct, or evade the on-site supervision of the firm, and falsely report, conceal, or destroy relevant evidence and materials, the firm may give disciplinary sanctions for not accepting the issuance and listing application documents and information disclosure documents submitted or signed by them within a certain period of time.

6. The investment value research report is an important reference for investors to participate in the inquiry activities. In order to enhance the quality of research reports, what are the arrangements in the Guidelines on Matters of Concern for Investment Value Research Reports?

Answer: In order to strengthen the supervision of all aspects of the inquiry, pricing and placement of new shares, improve the quality of investment value research report writing, and provide a more objective and prudent valuation reference for offline investors to participate in the inquiry, the Shanghai Stock Exchange has newly formulated the Guidelines for the Application of Securities Issuance and Underwriting Rules No. 3 - Matters Concerning Investment Value Research Reports (for Trial Implementation).

The first is to clearly write about the matters of concern. Focus on fundamental analysis, profit forecasts, valuation analysis and conclusions, risk warnings, etc., especially for market concerns such as price-earnings ratio, price per share, and excess raised funds corresponding to valuation conclusions, and clarify the requirements for targeted analysis and adequacy demonstration.

The second is to strengthen self-discipline and supervision. The purpose is to strengthen the ex-post supervision of investment value research reports and the reputation constraints of intermediaries, and consolidate the responsibilities of intermediaries by carrying out post-retrospective and classified evaluation management of the quality of report writing.

7. Please briefly introduce the situation of the "Stock Listing Rules" setting up strong restraint measures for dividends that do not meet the standard?

Answer: The purpose of this rule revision is to introduce the implementation of "other risk warning" (ST) measures if cash dividends do not meet the standard, with the purpose of urging the company to return investors with stronger constraints. Unlike the "Delisting Risk Alert" (*ST), a listed company will not be delisted simply because the dividend is not met.

When the dividend ratio and dividend amount accumulated in the past three years do not meet the requirements (that is, the net profit of the most recent fiscal year is positive and the undistributed profit at the end of the parent company's statement is positive, the total cumulative cash dividend of the last three fiscal years is less than 30% of the average annual net profit of the last three fiscal years and the cumulative cash dividend amount in the last three fiscal years is less than 50 million yuan), the company will be implemented ST. The amount of repurchase cancellation shall be included in the above-mentioned cash dividend amount. The index design takes into account the return demands of investors and the company's sustainable development needs, and the company can independently formulate a dividend plan according to the company's profitability and cash flow during the three-year evaluation period. In addition, the rules fully take into account the large R&D investment of enterprises on the STAR Market, and make differentiated arrangements.

When setting specific indicators this time, various factors affecting the dividends of listed companies such as undistributed profits and profitability were comprehensively considered, and it is expected that a large number of companies will not be implemented due to non-compliance with cash dividends. Based on the 2022 annual data, the number of companies involved in the Shanghai Stock Exchange is about 30. The rules will come into effect on 1 January 2025, with the first "most recent three financial years" referring to 2022 to 2024, with the companies involved still having time to improve their corporate dividends. After the official implementation of the rules, it will promote more companies to return real money to investors.

8. What are the SSE's arrangements for the implementation of the new delisting rules in the next step?

A: During the public consultation period, various market entities, especially individual investors, put forward valuable opinions and suggestions on optimizing and improving the delisting system, including improving the setting of delisting indicators, intensifying the crackdown on major violations, optimizing the implementation arrangements of the rules, and strengthening the protection of investors in delisting. On the whole, there is a consensus on increasing the supervision of delisting, and there are different considerations in the design of delisting indicators. In the process of drafting the rules, the SSE has considered and fully demonstrated the possible focus of attention from all sides. Combined with market feedback, here is a further explanation of the formulation and subsequent implementation of the rules:

The first is to clear accurately and advance steadily. In the case of financial delisting, the operating income index has been tightened, taking into account the market conditions and sector differences, the market value delisting index of the main board has been adjusted to fully assess the current situation of the market, and the delisting of the normative category and major illegal categories has been revised, reflecting the scientific setting and strict creation of the false orientation. From the perspective of the overall impact assessment, the overall target of the delisting rule revision is accurate, targeting "shell zombies" and "black sheep", reflecting the "retreat as much as possible", highlighting the quality and value of listed companies, and not targeting "small-cap stocks". At the same time, the implementation of the rules has set up a new and old separation arrangement to ensure a smooth transition, strictly crack down on companies that have been fraudulent for many years and companies that have occupied the funds of controlling shareholders and do not rectify, clarify the investor expectations of companies at risk of delisting, and strengthen risk disclosure.

The second is to intensify efforts and be strict in accordance with the law. The revision of the delisting rules focuses on cracking down on vicious violations of laws and regulations such as financial fraud and capital occupation. For major illegal delisting, a multi-level and three-dimensional delisting situation has been formed. On the basis of fraudulent issuance in initial listing, fraudulent issuance in restructuring and listing, fraudulent delisting in the financial category, and serious damage to the interests of the state and the public, the amendment tightens the circumstances of two-year fraud, adds one-year serious fraud, and three-year continuous fraud, scientifically sets the scope of application for major illegal delisting, and further strengthens the crackdown on serious financial fraud. In addition, the delisting of companies with internal control failures and the occupation of controlling shareholders' funds will also be strictly implemented. In particular, those who refuse to rectify after repeated occupations or occupy them again after rectification will be resolutely cleared.

Subsequently, the Shanghai Stock Exchange will earnestly assume the main responsibility for the implementation of delisting, conscientiously perform important responsibilities such as delisting decision-making, information disclosure supervision, transaction monitoring, etc., strengthen delisting supervision, and promote the acceleration of the formation of a normalized delisting pattern that should be withdrawn and cleared in a timely manner.

9. What specific measures does the SSE take to strengthen restructuring supervision and reduce the value of "shell" resources?

Answer: M&A and restructuring is an important way for the capital market to optimize the allocation of resources, and it is a powerful tool to support listed companies to become better and stronger. The new "National Nine Articles" emphasize that it is necessary to intensify the reform of mergers and acquisitions and reorganization, and take multiple measures to activate the merger and reorganization market. The China Securities Regulatory Commission (CSRC) issued the "Opinions on Strengthening the Supervision of Listed Companies (for Trial Implementation)", encouraging listed companies to comprehensively use shares, cash, directional convertible bonds and other tools to implement mergers and acquisitions.

In order to avoid the "shell zombies" and "black sheep" that should have been cleared out of the "flickering" restructuring, "three high" mergers and acquisitions, blind cross-border acquisitions, etc., cooperate with major shareholders to cash out, avoid delisting, disrupt market order, and harm the interests of small and medium-sized investors, the new "National Nine Articles" clearly require strengthening the supervision of mergers and acquisitions and further reducing the value of "shell" resources, and the China Securities Regulatory Commission's "Opinions on Strictly Implementing the Delisting System" requires strict supervision of mergers and acquisitions of listed companies on the risk warning board. In the next step, the Shanghai Stock Exchange will carry out refined supervision of the major asset restructuring of "shell" companies, strictly supervise the companies that have been "delisted risk warning" (*ST) due to the lack of ability to continue operations and then touch the revenue and profit indicators, and the companies that are on the verge of trading delisting indicators to plan major asset restructuring, and strictly prevent illegal "shell protection" and "shell speculation";

While strengthening the supervision of the restructuring of "shell" companies, policy measures such as improving the "small and fast" review mechanism, appropriately improving the inclusiveness of the valuation of M&A targets, and encouraging listed companies to absorb and merge have been implemented one after another, and the policy environment of the M&A and restructuring market has been continuously optimized. In order to support the efficient acquisition of high-quality assets by leading enterprises in the industry, for the restructuring of high-quality large-capitalization listed companies, they will be quickly reviewed in accordance with Article 43 of the "Rules for the Review of Major Asset Restructuring", so as to give full play to the market function of mergers and acquisitions to optimize resource allocation. In the next step, the SSE will continue to support listed companies to implement standardized restructuring transactions, promote the injection of high-quality assets and enhance investment value.

10. What arrangements has the SSE made for the implementation of the new rules?

A: In order to ensure the smooth implementation of the newly formulated and revised rules, in accordance with the characteristics of the rules and with reference to market opinions and suggestions, the SSE will make the following arrangements:

The first is the audit rules, which will be implemented from the date of promulgation of the rules. The provisions of the original review rules shall apply to the IPO projects that have passed the deliberation of the Listing Committee, and the IPO projects that have not passed the deliberations of the Listing Committee shall comply with the new listing conditions on the main board and the requirements for the attributes of science and innovation.

The second is the underwriting rules, which will be implemented from the date of promulgation of the rules. Lead underwriters and other investment value research report writers shall write and provide investment value research reports in accordance with the requirements of the Guidelines for Matters of Concern in Investment Value Research Reports.

The third is the continuous supervision rules, which will come into force on the date of promulgation. In order to maximize the smooth implementation of the new regulations such as dividends and delisting, and better protect the rights and interests of investors, the Shanghai Stock Exchange has made specific arrangements for the implementation time of dividends and delisting (including four types of mandatory delisting) in the notice of the issuance of the Stock Listing Rules on the Main Board and the Science and Technology Innovation Board, and has drawn the attention and knowledge of listed companies and investors.

11. In addition to formulating and revising business rules, what other measures does the SSE take to implement the new "National Nine Articles"?

Answer: The new "National Nine Measures" is a strategic measure to implement the spirit of the Central Financial Work Conference, which is of great significance for taking the road of financial development with Chinese characteristics and accelerating the construction of a financial power. In the next step, the Shanghai Stock Exchange will always adhere to the political and people's nature of the capital market, closely focus on the overall goal of accelerating the construction of a safe, standardized, transparent, open, dynamic and resilient capital market, deeply understand the spiritual essence of the new "National Nine Articles" of the capital market, and unswervingly implement the decision-making, deployment and work requirements of the Party Central Committee and the State Council into practical work.

The first is to do a good job in the implementation of the system. Strengthening system building and systematically improving various business rules is a fundamental step in implementing the new "National Nine Articles". At present, the Shanghai Stock Exchange is strictly comparing the requirements of the new "National Nine Articles" and the relevant policy documents of the China Securities Regulatory Commission, formulating and implementing the implementation plan at the exchange level, clarifying the construction drawings and schedules, and ensuring that the deployment and requirements are implemented as soon as possible and effective.

The second is to highlight the main line of strengthening supervision, preventing risks, and promoting high-quality development. Implement the requirements of "long teeth and thorns", angular and angular supervision, implement the concept of "five major supervision", and do a solid job in all aspects of front-line supervision. Efforts should be made to improve the ability to prevent and resolve major risks, and improve the policy toolbox for risk monitoring, response and disposal. We will give full play to the advantages of the Shanghai Stock Exchange's large-cap blue fundraising, leading hard technology, multi-variety support and precise services, promote the acceleration of the cultivation of new quality productivity, and serve the high-quality development of the economy and society.

The third is to forge a loyal, clean and responsible front-line supervision iron army. It is necessary to combine the implementation of the new "Nine Articles" with the study and education of party discipline that is currently being carried out, persist in turning the blade inward, strengthen the supervision of public power in all business chains, deeply promote the anti-corruption struggle, and eradicate the soil and conditions for the emergence of corruption problems. Strengthen the construction of cadres and employees, effectively improve the work style, and constantly enhance the sense of gain and satisfaction of market players.

The Shenzhen Stock Exchange answered reporters' questions on 9 rules, including the official release of the "Rules for the Review of Stock Issuance and Listing".

According to the Shenzhen Stock Exchange on April 30, 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 Risk Prevention and Promoting the High-quality Development of the Capital Market", in accordance with the unified deployment of the China Securities Regulatory Commission, on April 30, 2024, the Shenzhen Stock Exchange officially issued 9 supporting business rules including the "Stock Issuance and Listing Review Rules". The relevant person in charge of the Shenzhen Stock Exchange answered questions from reporters on the formulation and revision of the rules.

1. Please introduce the overall situation of the issuance of the business rules.

A: On April 12, the State Council issued the "Several Opinions on Strengthening Supervision and Risk Prevention and Promoting the High-quality Development of the Capital Market" (hereinafter referred to as the "New "National Nine Articles"), and the China Securities Regulatory Commission formulated a number of supporting policy documents to form a "1+N" policy system for the capital market. The Shenzhen Stock Exchange conscientiously implements the requirements of the new "National Nine Articles" and the policy documents of the China Securities Regulatory Commission, closely focuses on the overall goal of building a safe, standardized, transparent, open, dynamic and resilient capital market, firmly grasps the main line of strengthening supervision, preventing risks and promoting high-quality development, adheres to the direction of market-oriented and law-based reform, implements the requirements of "long teeth and thorns" and angular supervision, and focuses on strictly controlling the entry of issuance and listing, strengthening the supervision of listed companies, and strictly regulating delisting standards. In terms of consolidating the responsibilities of intermediaries, we will formulate and revise supporting business rules at the exchange level, further improve and improve the basic institutional system, promote the role of market functions, and help promote the high-quality development of the capital market.

The Shenzhen Stock Exchange revised and issued 9 business rules, which are specifically divided into three categories: first, 6 issuance and listing review rules, namely the "Stock Issuance and Listing Review Rules", "Listed Companies Material Asset Restructuring Review Rules", "Listing Review Committee and M&A and Reorganization Review Committee Management Measures", "Interim Provisions on the Application and Recommendation of Issuance and Listing of GEM Enterprises", as well as "Guidelines for the Acceptance of Application Documents" and "Guidelines for On-site Supervision". The main purpose of the revision and improvement of the above rules is to strengthen the strict control of the market entrance, improve the financial indicators of issuance and listing, improve the positioning and grasp standards of the GEM, strengthen the audit of financial authenticity, increase on-site supervision, standardize the pre-listing surprise "clearance" dividends, and tighten the responsibilities of intermediaries. The second is one issuance and underwriting rule, namely the "Guidelines for Matters of Concern in the Reporting of Investment Value Research Reports". The main purpose of its formulation is to implement the requirements of strict supervision of high-priced over-offerings, further standardize the issuance of investment value research reports by underwriters, and strengthen the supervision of issuance and underwriting. The third is two regulatory rules for listed companies, namely the Stock Listing Rules and the GEM Stock Listing Rules. The main purpose of the revision is to strengthen the continuous regulatory requirements, optimize the listing conditions, strengthen the hard constraints on cash dividends, strictly enforce the delisting standards, and accelerate the formation of a normalized delisting pattern that should be withdrawn and cleared in a timely manner.

At the same time, in accordance with the deployment requirements of the China Securities Regulatory Commission, the Shenzhen Stock Exchange is formulating and revising other supporting business guidelines based on market feedback, which will be released to the market as soon as possible.

2. In the early stage, the Shenzhen Stock Exchange solicited opinions from the public on the "Rules for the Review of Stock Issuance and Listing" and other business rules. Please give us a brief overview of the situation.

A: From April 12 to April 19, 2024, the Shenzhen Stock Exchange solicited opinions from the market on business rules such as the Rules for the Review of Stock Issuance and Listing through various forms, and simultaneously solicited the opinions of members and relevant market institutions on the rules and guidelines such as the Interim Provisions on the Application and Recommendation of the Issuance and Listing of GEM Enterprises. At the same time, some constructive suggestions were put forward on the improvement of the rules, mainly involving strengthening the self-discipline supervision of issuance and listing review, refining the positioning and review standards of the sector, improving the transition period of delisting standards and the setting of dividend indicators.

The Shenzhen Stock Exchange attaches great importance to the opinions and suggestions put forward by various market entities, carefully analyzes and researches, and adopts them by classification. First, it should be absorbed in the revision of the rules. On the basis of full and prudent assessment and consideration, reasonable and feasible opinions and suggestions were absorbed, and the corresponding rules and provisions were revised and improved, such as strengthening the initial offering review and restructuring review to punish intermediaries for violations. The second is to adopt it in specific work. A considerable part of the opinions and suggestions are related to the optimization and improvement of work, such as further strengthening the crackdown on financial fraud and capital occupation, and refining the criteria for reviewing and judging the positioning of the main board. The Shenzhen Stock Exchange has given full consideration to the review of issuance and listing and the supervision of listed companies, and has continuously improved and optimized the relevant work. For other opinions that have not been adopted this time, we will continue to further study and demonstrate the feasibility and specific implementation methods in combination with market development.

Next, the Shenzhen Stock Exchange will increase business training and publicity, do a good job in explaining the rules, and do a good job in the implementation of the rules.

3. Please introduce how to further improve the positioning and grasp standards of the GEM.

A: Optimizing the positioning of the sector is an important arrangement to improve the multi-level capital market system and promote high-quality development. The Shenzhen Stock Exchange has summarized practical experience, based on the practical needs of strictly controlling the entry of issuance and listing, supporting potential growth innovative and entrepreneurial enterprises, and promoting the development of new productive forces, revised the Interim Provisions on the Application and Recommendation of Issuance and Listing of GEM Enterprises, further clarified the specific criteria for grasping the positioning of the GEM, optimized the quantitative indicators of enterprise growth, and enhanced its adaptability and guidance functions.

The first is to further clarify the specific manifestations and grasp the logic of innovation, creativity and creativity. It is emphasized that enterprises applying for the GEM can promote enterprises to get rid of the traditional economic growth mode and productivity development path through innovation, creativity and creativity, and promote the high-level application of scientific and technological achievements, the innovative allocation of production factors, the deep transformation and upgrading of industries, and the development and growth of new kinetic energy;

The second is to moderately increase the compound growth rate index of operating income. Emphasizing the growth requirements of the GEM, the compound growth rate of operating income in the GEM positioning evaluation criteria will be moderately increased from 20% to 25%, and supporting the listing of growth-oriented innovative and entrepreneurial enterprises with development potential on the GEM.

The third is to increase the requirements for issuer descriptions and sponsor verification. Issuers are required to explain and sponsors to verify whether the issuer can promote the development of new productive forces through innovation, creativity and creativity, and specific explanations and verification requirements are added to the annex to further consolidate the responsibilities of issuers and intermediaries.

4. What are the revisions to the guidelines for the acceptance of application documents?

Answer: The new "National Nine Articles" clearly require that pre-listing surprise "clearance" dividends and other situations be included in the negative list for issuance and listing. In this regard, the Shenzhen Stock Exchange has revised the Business Guidelines for the Review of Stock Issuance and Listing No. 1 - Acceptance of Application Documents, adding a new negative list for issuance and listing, and clarifying the requirements for relevant application documents. The sponsor should issue a special verification opinion on whether the issuer has paid a surprise "liquidation" dividend in the past three years, and include the verification opinion in the scope of the application documents. A few days ago, the firm has answered reporters' questions and clarified the specific criteria for the surprise "clearance" dividend: the cumulative dividend amount in the reporting period accounts for more than 80% of the net profit in the same period, or the cumulative dividend amount in the reporting period accounts for more than 50% of the net profit in the same period and the cumulative dividend amount exceeds 300 million yuan, and the total proportion of the supplementary liquidity and repayment of bank loans in the raised funds is higher than 20%.

In addition, the Business Guidelines for the Review of Stock Issuance and Listing No. 1 - Acceptance of Application Documents will include the issuer applying for an initial public offering and its actual controllers, directors, supervisors, senior management and other "key minority" whether there are major negative circumstances such as reputation and reputation listed in the CSRC's "Regulatory Provisions on Initial Public Offering and Listing Guidance", and the sponsor also needs to issue a special verification opinion and include it in the scope of the application documents.

5. This revision further strengthens the on-site supervision, which is mainly reflected in what aspects?

Answer: On-site supervision is an extension of the written review of issuance and listing, and it is an important means to strictly control the entry of issuance and listing. In order to further implement the spirit of policy documents such as the China Securities Regulatory Commission's "Opinions on Strictly Controlling the Access to Issuance and Listing and Improving the Quality of Listed Companies from the Source (Trial)", implement the requirement of "declaration is responsible", and consolidate the "gatekeeper" responsibility of intermediaries, the Shenzhen Stock Exchange has revised the "Business Guidelines for the Review of Stock Issuance and Listing No. 4 - On-site Supervision", focusing on strengthening on-site supervision from the following three aspects.

The first is to make it clear that "one governor will be supervised to the end". Curb the phenomenon of "withdrawal after supervision", strengthen strict supervision and warning deterrence, and make it clear that if an issuer withdraws its application for issuance and listing or a sponsor withdraws its sponsorship of an on-site supervision project, it will not affect the implementation of supervision work.

The second is to broaden the coverage of on-site supervision. On the basis of problem-oriented on-site supervision, the "random selection" on-site supervision method is added, and on-site supervision of sponsors can be initiated from time to time according to the results of the quality-oriented practice quality evaluation of listed companies. In addition to the review process, it is clarified that after the project has passed the review of the listing review committee of the exchange and before the stock is listed and traded, if there is a significant impact on whether the issuer meets the issuance conditions, listing conditions or information disclosure requirements, on-site supervision can be initiated as necessary.

The third is to strengthen the effective connection between on-site supervision and self-discipline supervision. It is clear that for violations found by on-site supervision, corresponding self-regulatory measures or disciplinary actions will be taken. In view of the negative cooperation of individual supervision objects in practice, it is expressly guaranteed that if the sponsor or securities service institution refuses, obstructs, or evades on-site supervision, or falsely reports, conceals, or destroys relevant evidence materials, it will not accept the issuance and listing application documents submitted by it within a certain period of time.

6. Please introduce the main contents of the guidelines for the formulation of investment value research reports, and how to further improve the quality of investment value research reports?

Answer: The investment value research report provided by the underwriter is an important reference for offline investors to participate in the inquiry and quotation of new shares. In order to further strengthen the supervision of all aspects of the inquiry, pricing and placement of new shares, rectify the phenomenon of over-offering at high prices, and urge underwriters to provide more objective and neutral investment value research reports, the Shenzhen Stock Exchange has formulated the "Issuance and Underwriting Business Guidelines No. 4 - Matters of Concern for the Filing of Investment Value Research Reports (Trial)", which mainly includes two aspects.

The first is to refine the standard requirements for the content of the investment report. According to regulatory practice, it is clarified that the investment value research report of the exchange will focus on fundamental analysis, profit forecast, valuation analysis and conclusion, risk warning and other main contents. In view of the fact that the valuation conclusion of the investment report is at a premium to the industry or comparable companies, or that the valuation conclusion is over-raised, it is clearly required to conduct detailed analysis, fully assess the prudence and reasonableness of the valuation conclusion, and strengthen risk disclosure.

The second is to establish a retrospective supervision mechanism after the fact. On the basis of routine supervision, establish a retrospective supervision mechanism, regularly review the realization of profit forecasts, valuation conclusions and post-listing market value differences in investment value research reports, and take regulatory measures or disciplinary actions against imprudent writing of investment value research reports. At the same time, strengthen reputation constraints, increase supervision, and urge underwriters to return to their responsibilities.

7. What are the specific considerations for the strong restraint measures set out in the listing rules of the Main Board and the Growth Enterprise Market for dividends that do not meet the standard?

Answer: The amendment of the rules introduces the implementation of "other risk warning" (ST) measures if the cash dividend does not meet the standard, focusing on the company that is profitable and has a surplus but does not pay dividends for a long time or has a low dividend ratio, and the applicable premise is that the company's net profit in the most recent fiscal year is positive and the parent company and the undistributed profit at the end of the consolidated statement year are positive, and the main purpose is to urge the listed company to return investors with stronger constraints. The implementation of "Other Risk Alert" is not a "Delisting Risk Alert" (*ST), and the fact that a company is ST because it does not meet the dividend target will not result in delisting.

In terms of implementation conditions, the overall evaluation of the dividends in the past three years will only be implemented when the cumulative dividend ratio of the three years (the total cumulative cash dividends in the last three fiscal years are less than 30% of the average annual net profit of the last three fiscal years) and the dividend amount (the cumulative dividend amount in the last three fiscal years is less than 50 million yuan for the main board and 30 million yuan for the gem) do not meet the requirements. The index setting takes into account the return demands of investors and the needs of the company's sustainable development, and the company can independently formulate a dividend plan according to the company's profit and cash flow during the three-year evaluation period, and it is not mandatory for the company to pay dividends in a fixed proportion every year. At the same time, the rules fully take into account the large R&D investment of GEM enterprises, and for GEM companies with high R&D intensity (the cumulative R&D investment in the last three fiscal years accounts for more than 15% of the cumulative operating income) or a large R&D scale (the cumulative R&D investment in the last three fiscal years is more than 300 million yuan), they can be exempted from the implementation of ST.

In the process of revising the rules, the Shenzhen Stock Exchange has fully assessed and demonstrated the relevant situation, taking into account the impact on the market and the company's adaptation time. The relevant provisions will come into force on January 1, 2025, in which the "last three fiscal years" refer to the years from 2022 to 2024, and listed companies affected by the rules can increase the level of cash dividends or repurchase shares and cancel them during the transition period to enhance investors' return ability.

8. Please introduce the arrangements for the release of the rules and the implementation of the rules in the next step in light of the consultation on the revision of the delisting rules.

A: During the public consultation period, various market entities, especially individual investors, put forward valuable opinions and suggestions on optimizing and improving the delisting system, including improving the setting of delisting indicators, intensifying the crackdown on major violations, optimizing the implementation arrangements of rules, and strengthening investor protection during delisting. Overall, there is a broad consensus on strengthening the supervision of delisting. After the end of the consultation, the Shenzhen Stock Exchange, under the guidance of the China Securities Regulatory Commission, conducted a full demonstration and prudent study of the matters involved in the feedback. The requirements for the formulation and subsequent implementation of the delisting rules are further explained as follows.

The first is to clear accurately and advance steadily. The revision of the delisting rules resolutely implements the requirements of the new "National Nine Articles" on "increasing the supervision of delisting". The main board financial delisting situation has tightened the operating income index, and the main board A share (including A+B shares) trading situation has increased the market value index, which has comprehensively considered the market situation, sector positioning and the development of listed companies. The revision of the delisting situation of the normative category and the major illegal category reflects the scientific setting and strict supervision and strict management orientation. From the perspective of the overall impact assessment, the delisting rules are precisely targeted, targeting "shell zombies" and "black sheep", strictly cracking down on companies that have been fraudulent for many years and have the funds occupied by controlling shareholders and do not rectify, highlighting the quality and investment value of listed companies, and not targeting "small-cap" companies. At the same time, the implementation of the rules has set up a demarcation arrangement to ensure a smooth transition between the old and new regulations, clarify investors' expectations, and strengthen risk disclosure.

The second is to intensify efforts to strictly supervise and manage. The revision of the delisting rules focuses on cracking down on vicious violations of laws and regulations such as financial fraud and capital occupation. First, for major illegal delisting, a multi-level and three-dimensional delisting situation has been formed, and on the basis of fraudulent issuance, fraudulent evasion of financial delisting and five major security situations in initial listing and restructuring listing, this revision tightens the two-year fraud situation, adds one year of serious fraud, and three years of continuous fraud, scientifically sets the scope of application of major illegal delisting, and further strengthens the crackdown on serious financial fraud. Second, for the failure of internal control, companies with the funds of controlling shareholders will be strictly delisted. In particular, those who refuse to rectify after repeated occupations or occupy them again after rectification will be resolutely cleared.

The third is to strictly pursue accountability and strengthen relief. We will continue to strengthen accountability and protection of investors' interests. On the one hand, we will resolutely discipline the delisted companies that have violated laws and regulations, make good use of the "public identification" measures to severely punish the responsible persons, and will continue to strengthen the all-round three-dimensional accountability such as administrative punishment, criminal accountability, and civil compensation with the regulatory authorities and judicial organs, and effectively increase the punishment of relevant entities for violating the law. On the other hand, we will strengthen the risk disclosure of delisting risk companies and clarify investors' expectations. Where there are false records and other conduct that infringes on the interests of investors, promote the comprehensive use of methods such as representative litigation and advance compensation to preserve the lawful rights and interests of investors.

Next, the Shenzhen Stock Exchange will earnestly assume the main responsibility for the implementation of delisting, conscientiously perform important responsibilities such as delisting decision-making, information disclosure supervision, and transaction monitoring, increase delisting supervision, and promote the formation of a normalized delisting pattern that should be withdrawn and cleared in a timely manner.

9. What are the specific measures to strengthen the supervision of restructuring and reduce the value of "shell" resources?

In order to avoid the "shell zombies" and "black sheep" that should have been cleared out of the "flickering" restructuring, "three high" mergers and acquisitions, blind cross-border acquisitions, etc., cooperate with major shareholders to cash out and avoid delisting, disrupt market order, and harm the interests of small and medium-sized investors, the new "National Nine Articles" clearly require strengthening the supervision of mergers and acquisitions and further reducing the value of "shell" resources, and the "Opinions on Strictly Implementing the Delisting System" of the China Securities Regulatory Commission requires strict supervision of mergers and acquisitions of listed companies on the risk warning board. In the next step, the Shenzhen Stock Exchange will carry out refined supervision of the major asset restructuring of "shell" companies, strictly supervise the companies that have been hit by *ST due to the lack of ability to continue operations, and the companies that are on the verge of trading delisting indicators to plan major asset restructuring, and strictly prevent illegal "shell" and "shell speculation";

While strengthening the supervision of the restructuring of "shell" companies, policy measures such as improving the "small and fast" review mechanism, appropriately improving the inclusiveness of the valuation of M&A targets, and encouraging listed companies to absorb and merge have been implemented one after another, and the policy environment of the M&A and restructuring market has been continuously optimized. In order to support the efficient acquisition of high-quality assets by leading enterprises in the industry, the restructuring of high-quality leading listed companies shall be subject to rapid review in accordance with Article 43 of the Rules for the Review of Major Asset Restructuring of Listed Companies. Next, the Shenzhen Stock Exchange will continue to support listed companies to standardize the implementation of restructuring transactions, promote the injection of high-quality assets and enhance investment value.

10. What arrangements has the Shenzhen Stock Exchange made for the implementation time of the new regulations?

The first is the issuance and listing review rules, which will be implemented from the date of promulgation of the rules. Initial public offerings that have not passed the deliberations of the Listing Committee shall comply with the new listing requirements of the Main Board and GEM, and the provisions of the original review rules shall apply to the initial listing projects that have passed the deliberations of the Listing Committee. For IPO projects that fail to pass the review of the Listing Committee and do not meet the new listing conditions and GEM positioning requirements, the Shenzhen Stock Exchange will guide them to re-apply for listing on other suitable boards and do a good job of continuous review.

The second is the issuance and underwriting rules, which will come into force on the date of promulgation. The institution that writes the investment value research report shall write and issue the investment value research report in accordance with the requirements of the Guidelines for Matters of Concern in the Reporting of Investment Value Research Reports.

The third is the regulatory rules for listed companies, which will come into force on the date of promulgation. In order to maximize the smooth implementation of new regulations such as dividends and delisting, and better protect the rights and interests of investors, the Shenzhen Stock Exchange has made differentiated arrangements for the implementation time of dividends and delisting (including four types of mandatory delisting) in the issuance notice of the Stock Listing Rules and the GEM Stock Listing Rules, and has drawn the attention and knowledge of listed companies and investors.

11. In addition to formulating and revising business rules, how does the Shenzhen Stock Exchange further implement the new "National Nine Articles"?

Answer: The new "National Nine Measures" is a major measure to implement the spirit of the Central Financial Work Conference and promote the high-quality development of the capital market in the new era and new journey, which is of great significance for taking the road of financial development with Chinese characteristics and accelerating the construction of a financial power. Under the unified leadership of the China Securities Regulatory Commission and the supervision and guidance of the Discipline Inspection and Supervision Group of the Central Commission for Discipline Inspection and the State Supervision Commission in the China Securities Regulatory Commission, the Shenzhen Stock Exchange will deeply study and comprehend the spiritual essence of the new "National Nine Articles", deeply understand and grasp the political and people's nature of the exchange's work, implement the decision-making and deployment of the Party Central Committee and the State Council and the work requirements of the Party Committee into practical work, transform the development blueprint outlined by the new "National Nine Articles" into construction drawings for building a world-class exchange, and pay close attention to the task decomposition of the implementation of the "1+N" policy document to ensure that the responsibilities are clear. The measures are in place, and the key tasks and deployment requirements are solidly promoted to be implemented on the exchange as soon as possible.

The first is to adhere to the main business of supervision and fully implement the concept of "five major supervision". Strengthen the construction of the rule of law in the market, highlight the "strong foundation" and "strict supervision and strict management", take strong supervision and strict supervision as the top priority, pay close attention to the implementation of new system rules, do a good job in the supervision of the whole chain of listed companies, tighten and consolidate the responsibilities of intermediaries, strengthen the supervision of transaction supervision behavior, severely crack down on violations of laws and regulations, and maintain the order of the "three publics" in the market. The second is to adhere to the bottom-line thinking and make every effort to prevent and resolve risks in key areas. Coordinate development and security, strengthen risk monitoring and prediction, dynamically investigate risks in key areas, improve the ability to identify and deal with systemic risks, firmly guard the bottom line of no systemic risks, promote and improve the mechanism for attracting medium and long-term funds, and enhance the internal stability of the market. The third is to adhere to overall planning and cooperation to better serve high-quality development. Improve market functions, promote the establishment of a green channel mechanism for the financing of science and technology enterprises, guide the flow of social funds to key national support areas, deepen communication and coordination with local governments, relevant ministries and commissions, promote the improvement of the quality of listed companies, form a joint force to promote the high-quality development of the capital market, help cultivate new quality productivity, and improve the quality and efficiency of serving the real economy. Fourth, we should insist on turning the blade inward and strengthen the self-building of the cadre team. Consciously accept the supervision and guidance of the Discipline Inspection and Supervision Group of the Central Commission for Discipline Inspection and the State Supervision Commission in the China Securities Regulatory Commission, closely cooperate with the on-site supervision of the Shenzhen Stock Exchange Working Group of the Discipline Inspection and Supervision Group of the China Securities Regulatory Commission, carry out party discipline learning and education, strengthen the prevention and control of integrity risks, strengthen the restraint and supervision of public power in each business chain, run the supervision requirements through the whole process of work, continue to improve the work style, and strive to build a "three excellent" supervision team, so as to provide a strong guarantee for the high-quality development of the exchange.

Source of this article: Shanghai Securities News, China Securities Network

WeChat editor: Guan Qiao

Introduction to "Risk Warning: Financial Edition".

Finance is the lifeblood of the modern economy, and financial stability leads to economic stability. Financial security is related to the overall development of national and regional enterprises, and it is necessary to maintain a high degree of vigilance against financial risks at all times, enhance the awareness of risk prevention, respond scientifically, and prevent them from occurring. Under the guidance of the authoritative government departments, relying on the advanced big data public opinion monitoring system and a professional analyst team, the "Risk Warning Financial Edition" produced by the China Financial Information Center summarizes, analyzes, and judges the risk public opinion in different fields and categories of the financial industry, and provides authoritative, professional, practical, timely and effective financial risk public opinion monitoring, research and judgment, early warning and response suggestions for financial regulatory departments, factor markets, financial institutions, listed companies, industry associations, various enterprises, colleges and universities, research institutions, etc. 18,000 per year, once a week, released every Friday.

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