China Securities Regulatory Commission: The reform of the full implementation of the stock issuance registration system has officially started

On February 1, the China Securities Regulatory Commission issued a notice on the transition period arrangements for relevant administrative licensing matters before and after the full implementation of the stock issuance registration system. The notice pointed out that on February 1, 2023, the reform of the stock issuance registration system will be fully implemented. From the date of issuance of the notice, the China Securities Regulatory Commission will continue to accept applications for initial public offerings, refinancing and mergers and acquisitions on the main board. Before the full implementation of the registration system, the China Securities Regulatory Commission will normally promote the above-mentioned administrative licensing work in accordance with the current regulations. | Related reading (published by China Securities Regulatory Commission)


Q: What are the important measures of this reform to improve the main board trading system?

Answer: This reform draws on the experience of the Science and Technology Innovation Board and the Growth Enterprise Market, and further improves the main board trading system with a more market-oriented and convenient orientation. Main measures: First, there will be no price limit for the five trading days before the listing of new shares. The second is to optimize the intraday temporary suspension system. The third is that new shares can be included in the subject of margin financing and securities lending on the first day of listing, optimize the refinancing mechanism, and expand the scope of securities lending and securities lending sources.

What needs to be explained is that this reform proceeds from the reality of the main board, and no adjustments have been made to the two systems. First, starting from the sixth trading day of the IPO listing, the daily price limit will remain unchanged at 10%. The main consideration is that, based on practical experience, the volatility of stock stocks and new stocks on the main board is relatively low from the sixth trading day, and the 10% price limit can meet the pricing needs of most stocks. The second is to maintain the current investor suitability requirements of the main board unchanged, and there are no restrictions on investors’ assets and investment experience.

Investors here are reminded that after the reform of the main board, the issuance and listing conditions have become more inclusive, and the issuance pricing and trading systems have also changed. I hope that everyone can fully understand these system changes and risk points, and make prudent investment decisions.

Question: After the full implementation of the stock issuance registration system, what measures will be taken to combine decentralization and regulation?

Answer: The combination of decentralization and management is an integral part of the reform of the registration system. The general idea is to strengthen the supervision of the whole process before and after the event, increase the intensity of “management” while “releasing”, urge all market players to return to their positions and perform their duties, and create a good market ecology.

At the front end, stick to the positioning of the sector, compact the responsibilities of issuers, intermediaries, exchanges and other levels, strictly review and strictly control the quality of listed companies. The implementation of the registration system does not mean relaxing the quality requirements, and it does not mean that whoever wants to send it out. In particular, it is necessary to make good use of on-site inspections, on-site supervision and other means, adhere to the principle of “responsibility upon declaration”, and if an issuer is found to be suspected of major violations of laws and regulations, timely take investigations, suspend review and registration, suspend issuance and listing, and revoke issuance registration, etc. measure. At the same time, scientifically and rationally maintain the normalization of new share issuance, maintain the dynamic balance of investment and financing, and promote the coordinated development of the primary and secondary markets.

In the middle end, strengthen the linkage between issuance supervision and continuous supervision of listed companies, and standardize the governance of listed companies. Strengthen the supervision of information disclosure of listed companies, and further tighten the information disclosure responsibilities of listed companies, shareholders and related parties. Unblock multiple exit channels such as compulsory delisting, voluntary delisting, mergers and acquisitions, bankruptcy reorganization, etc., and promote the survival of the fittest among listed companies. Strictly implement the delisting system, strengthen delisting supervision, and improve the major delisting risk disposal mechanism.

On the back end, maintain a high-pressure situation of “zero tolerance” law enforcement. Conscientiously implement the “Opinions on Strictly Cracking Down on Illegal Securities Activities in accordance with the Law”, establish and improve the law enforcement and judicial system and mechanism to strictly crack down on illegal securities activities, severely crack down on serious illegal activities such as fraudulent issuance and financial fraud, and seriously investigate issuers, intermediaries and related parties. Responsibility of personnel, forming a strong deterrent.

The China Securities Regulatory Commission will adapt to the requirements of the full implementation of the registration system, accelerate regulatory transformation, promote the construction of scientific and technological supervision, and effectively improve regulatory capabilities.

Zhang Xuefeng

The risk control threshold of the registration system is lowered, and market access is more convenient. However, it may cause generalization of investment, and everyone will flock to it in the short term.

Generally speaking, the registration system is the general trend and is conducive to the development of the securities market.

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