——Interview with Liu Jipeng, Professor of China University of Political Science and Law and Former Dean of the Capital Finance Research Institute· How to speed up the implementation of the new "National Nine Articles" ·
Editor's note: Since the State Council issued the "Several Opinions on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Capital Market" in April 2024, the capital market has started a deeper reform, and the "1+N" policy system is also accelerating its implementation. Wu Qing, chairman of the China Securities Regulatory Commission, said: "A strong capital market is the standard of the modern economy. "In this issue, the capital market conducted an in-depth analysis on the strict access to issuance and listing, the acceleration of the delisting process, and the changes in cash dividends, and discussed the reform of the stock issuance registration system and the reform of the independent director system. Experts said that in the next two years, a considerable number of companies will choose to withdraw due to strong supervision, and subsequent IPOs can grasp the rhythm under strict supervision.
■China Economic Times reporter Liu Hui
Since the issuance of the Several Opinions on Strengthening Supervision and Risk Prevention and Promoting the High-quality Development of the Capital Market in April 2024 (hereinafter referred to as the "New 'National Nine Articles'"), the capital market has embarked on a deeper reform, and the implementation of the "1+N" policy system has been accelerated. Regarding the requirements of the new "National Nine Articles" to strictly control the entry of issuance and listing and improve the quality of listed companies, a reporter from the China Economic Times recently interviewed Liu Jipeng, a professor at China University of Political Science and Law and former president of the Capital and Finance Research Institute. There is no doubt that improving the quality of listed companies from the source will promote the healthy development of the capital market.
The advisory or expert committee shall participate in the registration system for the issuance of shares
China Economic Times: The China Securities Regulatory Commission (CSRC) has issued four supporting policy documents this year, and has also revised the Guidelines for the Evaluation of Scientific and Technological Innovation Attributes (Trial), and will study and formulate reform measures to promote the long-term development of the capital market. What suggestions do you have for the listing access and the registration system for stock issuance?
Liu Jipeng: The new "National Nine Articles" emphasize the systematization and the "1+N" policy system, of which the listing link is the key, and the core is to deal with the relationship between the development direction of the comprehensive registration-based reform of the capital market and the quality of IPO listed companies. In 2019, the first batch of companies listed on the Science and Technology Innovation Board were listed and traded; In 2020, the GEM reform and the pilot registration-based system will be implemented; In 2021, the Beijing Stock Exchange will open and pilot the registration-based system. In February 2023, the full implementation of the reform of the registration system for stock issuance was officially launched.
After the implementation of the registration system, the pace of listing of enterprises has accelerated, and from 2018 to the present, more than 1,900 companies have been listed. After the promulgation of the new "Nine Articles", it is necessary to further improve the registration system. Earlier, when I communicated with the relevant people of the China Securities Regulatory Commission about the fifth set of listing standards of the Science and Technology Innovation Board, I said that some high-tech companies have no profits and no revenue, but if these companies are not allowed to go public, they may be listed in other countries and regions. Under such circumstances, it is necessary to further improve the system for listing high-tech companies in order to properly handle the registration-based system and the listing of high-tech companies. Therefore, you can consider giving it a special symbol to remind investors that there is a certain risk in this kind of company, but it is a high-tech company, in line with the direction of future industrial development, if the company develops smoothly, it will obtain high returns, after all, some investors are willing to invest in such companies.
In addition, the registration system also requires a professional consultant or expert committee to set up a issuance review center or issuance review committee, which can be composed of no more than 50 experts. At least 5 experts or consultants should attend the meeting and ask questions to the enterprise, and all the questions and corporate replies should be published on the Internet to meet the public's right to know. If the company's answer is not satisfactory, then it needs to be reprepared. If the questions of experts are passed and underwritten by a brokerage, then the company can be listed.
Sponsors and underwriters are subject to strict punishments, and underwriting for enterprises must be sponsored for at least 10 to 20 years, and in the event of problems, the sponsor must bear relevant responsibilities. In the process of delisting, we must firmly grasp the "black sheep", if the major shareholders or intermediaries commit fraud, once it is verified, they will be punished, and major fraud will be severely punished, and at the same time, administrative penalties and criminal penalties must be combined. In addition, whether the China Securities Regulatory Commission can set up a small and medium-sized investor protection fund as a protection fund for investors of delisted enterprises.
Ideally, there should be no more than 5,000 listed companies
China Economic Times: According to some analysts, the number of A-share listed companies has exceeded 5,300, and the pace of delisting should be accelerated, what do you think about this?
Liu Jipeng: At present, there are indeed a lot of listed companies, especially in the context of the registration system, and the development of companies is uneven. There are three stock markets in the United States, and there are about 5,700 publicly traded companies over the past 200 years. The mainland capital market has been developing for 34 years, but there are more than 5,300 listed companies. To ensure the quality of listed companies, we must make a series of considerations from the aspects of company listing, in-process supervision, and delisting.
In the context of the registration system, it is necessary to be decisive when it is necessary to be decisive when an enterprise is delisted, but it is necessary to distinguish the causes of the delisting, such as financial fraud or the company's unsatisfactory development. If it is a normal operating loss, the investor has to accept and bear it; If the major shareholder cashes out after fraud, then it is necessary to combine administrative penalties and criminal penalties.
The launch of the new "National Nine Articles" will further tighten the "entry gate" of listing, appropriately slow down the company's listing rhythm, and will not delay the company's long-term development in the future. A significant number of companies are expected to exit in the next two years. With China's current development scale, in the future, it is best not to exceed 5,000 listed companies. Some listed companies will choose to exit under the strong supervision of "long teeth and thorns". However, follow-up IPOs can also be gradually opened under strict supervision and at a good pace.
Independent directors should be the "eyes" of the CSRC
China Economic Times: The new "National Nine Articles" put forward the development goals of the capital market in the next five years, 2035 and the middle of this century in stages, and outlined a blueprint for the high-quality development of the capital market from the aspects of investor protection and improving the quality of listed companies. What do you think needs to be done to improve the quality of listed companies?
Liu Jipeng: On the issue of improving the quality of listed companies, the important thing at present is to improve the independent director system, so that 12,000 independent directors can become the "eyes" of the China Securities Regulatory Commission. However, the current independent directors are all hired by the major shareholders through the board of directors, and the mission of the independent directors is to restrain the major shareholders, which has certain problems in practice.
At the same time, it is also necessary to improve the system of "executive directors in charge of operation and independent directors in charge of supervision" in listed companies, and the system of independent directors generation, incentive and punishment and personnel selection is very important. The pre-IPO selection of independent directors of each listed company can be resolved by the board of directors of the listed company and the independent director working committee to the independent director talent pool, with the aim of enabling independent directors in China to gradually develop from the current part-time independent directors to professional independent directors.
The independent director examination can also be submitted to organizations such as the Association of Listed Companies, which will formulate the remuneration standards for independent directors. It is also possible to train a group of professional independent directors and let these people apply for corresponding titles in the Ministry of Human Resources and Social Security. Listed companies are the backbone of China's economy, and it is worth spending time and energy to cultivate 10,000 or 20,000 professional independent directors. In addition, it is necessary to learn from international experience, respect China's national conditions, and continue to improve and innovate the independent director system.
Chief Producer丨Wang Hui and Che Haigang
Producer丨Li Piguang, Wang Yu, Liu Weimin
Editor-in-Chief丨Mao Jinghui Editor丨Cao Yang