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China Securities Regulatory Commission: Refuse to “break through the border while sick” and insist on “retreating when necessary”

China Securities Regulatory Commission: Refuse to “break through the border while sick” and insist on “retreating when necessary”


The China Securities Regulatory Commission recently held a press conference to respond to hot issues such as IPO supervision, delisting, shareholding reduction, and refinancing that the current market is concerned about. The person in charge of the relevant departments of the China Securities Regulatory Commission said that the China Securities Regulatory Commission has strengthened issuance supervision and strictly controlled IPO entrances. At the same time, it insists on “retiring everything that should be done” and continues to consolidate and deepen the normalized delisting mechanism. The China Securities Regulatory Commission will also adhere to the “zero tolerance” crackdown and effectively make administrative law enforcement “thorny”.

Strictly control IPO entrance

Consolidate the normalized delisting mechanism

The supervision of IPOs is one of the issues that the market is most concerned about. The China Securities Regulatory Commission stated that after the registration system reform, issuance supervision has become more stringent and the quality requirements for IPO companies are higher.

Zhou Xiaozhou, the main person in charge of the Comprehensive Business Department of the China Securities Regulatory Commission, said that the registration system reform is a profound change from the underlying logic to ideological concepts and behavioral methods, involving the entrance and exit of the capital market, primary and secondary markets, investment and financing, legislation and law enforcement, etc. The entire chain in various fields is by no means “the registration system is to move the IPO review from the China Securities Regulatory Commission to the exchange” as some people say.

Zhou Xiaozhou introduced that since the reform of the registration system, the China Securities Regulatory Commission has further strengthened the “gatekeeper” responsibilities of intermediaries and has taken regulatory measures against 69 securities companies and 381 responsible persons engaged in investment banking business, especially against 5 companies with serious problems. The securities company suspended its sponsorship business and identified 55 employees as inappropriate candidates. At the same time, the China Securities Regulatory Commission investigated and handled nearly 1,900 cases of various types, transferred nearly 600 suspected securities and futures crimes to the public security, and resolutely investigated and dealt with a number of major cases such as Kangmei, Kangdexin, Amethyst Storage, and Zeda Yisheng, conveying a message to the market. “Zero tolerance” is a strong signal to purify the market ecology, and the regulatory deterrent effect has been significantly enhanced.

“The registration system does not mean relaxing controls.” Yan Bojin, director of the Issuance Department of the China Securities Regulatory Commission, also said that among the more than 1,000 companies that have completed the pilot registration system in the past five years, the proportion of withdrawals and rejections is close to 40%. Companies that do not meet the requirements are blocked from the market.

On the other hand, at the export end of the market, Guo Ruiming, Director of the Listing Department of the China Securities Regulatory Commission, introduced that since the reform of the delisting system in 2020, a total of 127 companies have delisted, of which 104 have been forced to delist. The number of forced delistings is 10 before the reform. Nearly three times that of last year, showing two characteristics: First, face value delistings have increased significantly. Last year, the number of face value delistings was close to half of all delisted companies, and a self-regulatory mechanism of survival of the fittest in the market has begun to take shape; second, delistings involving major violations have increased. , last year eight companies entered the delisting process due to meeting major illegal standards. The delisting of these companies has brought about profound changes in the performance of intermediaries’ duties, investment concepts, and market ecology, which are generally in line with reform expectations.

Guo Ruiming emphasized that the core of the delisting reform is to insist on “retreating as much as possible”. While retreating, we must retreat steadily. It does not mean that the more retreat, the better. In the next step, the China Securities Regulatory Commission will continue to consolidate and deepen the normalized delisting mechanism in accordance with the reform requirements. First, continue to open up diversified exit channels, support the effective integration of resources through mergers and acquisitions, and promote the improvement of the bankruptcy and reorganization system. The second is to strictly implement the delisting rules, adhere to the principle of “delisting when necessary”, severely crack down on malicious “shell preservation” behaviors such as financial fraud and market manipulation associated with the delisting process, and maintain the seriousness of the delisting system. The third is to resolutely prevent “retreating”.

Promote dynamic balance of investment and financing

Improve market attractiveness

“The China Securities Regulatory Commission has always attached great importance to the dynamic balance between the financing side and the investment side.” Shen Bing, director of the Institutional Department of the China Securities Regulatory Commission, said that after launching the stock issuance registration system reform in 2019, the China Securities Regulatory Commission has vigorously developed equity-related products while maintaining the normalization of IPOs. funds, increase the introduction of medium and long-term funds, and actively cultivate active and stable long-term investment capabilities.

According to reports, from the financing side, the total amount of A-share IPOs in the past five years has been 2.2 trillion yuan, and the total refinancing amount has been 3.8 trillion yuan, making the total financing amount approximately 6 trillion yuan. From the investment side, the total circulating market value of A-shares held by public funds, pension funds, insurance and other medium- and long-term funds has increased from 6.4 trillion yuan to 15.9 trillion yuan, an increase of more than 100%, and the shareholding ratio has increased from 17% to 23%. %. Equity funds increased from 2.3 trillion yuan to 7 trillion yuan, and their proportion of public funds increased from 18% to 26%. The circulating market value of A-shares held by Beishang Capital increased from 0.7 trillion yuan to 2 trillion yuan. The circulating market value of A-shares held by individual investors increased from 10.8 trillion yuan to 22.1 trillion yuan. The investment and financing ends of the capital market generally maintain balanced development. At the same time, investor returns continue to strengthen. In the past five years, A-shares have paid a cumulative dividend of 8.4 trillion yuan, and the amount of dividends exceeded the current financing amount; public funds have made a cumulative profit of 2 trillion yuan, and distributed dividends of 2.2 trillion yuan.

“We do not only focus on financing but not investment.” Shen Bing said that in the new stage of promoting the registration system reform to be deeper and more solid, the China Securities Regulatory Commission will comprehensively benchmark the spirit of the Central Financial Work Conference and further establish an investor-centered approach. Based on the concept of market development, we will further deepen reforms, promote the coordinated development of investment and financing, and continue to enhance the attractiveness of the capital market and long-term returns for investors.

In terms of market refinancing, Yan Bojin introduced that since the implementation of optimized refinancing arrangements in 2023, the number of refinancing announcement plans and acceptances has decreased, and listed companies have become more prudent and rational in implementing refinancing. At the same time, the number of approvals issued has dropped significantly. From September to December last year, 95 approvals were issued, an average monthly decrease of 40% from the previous eight months. The regulatory orientation of strict control has become more clear. Funds raised for initial issuance and refinancing have also decreased. From September to December last year, funds raised averaged 27.1 billion yuan per month, down 43% from the previous eight months. The effects of countercyclical adjustments and supporting the good and limiting the bad are emerging.

In terms of the implementation of new regulations on shareholding reduction, Guo Ruiming said that overall, the shareholding reduction system in our country’s market is stricter than that in overseas markets. According to current indicators, there are nearly 2,300 controlling shareholders and actual controllers of companies in Shanghai and Shenzhen that are restricted from reducing their holdings. Some controlling shareholders and actual controllers also took the initiative to terminate their shareholding reduction plans. For various illegal holding reductions, the China Securities Regulatory Commission promptly ordered corrections, and the relevant entities took the initiative to repurchase and hand over the price difference proceeds to the listed companies; in serious cases, they were punished in accordance with the law, which maintained the seriousness of the holding reduction system.

Implement “zero tolerance”

Build a three-dimensional accountability system with “tears and thorns”

The rule of law is the cornerstone of the capital market. Li Ming, chief prosecutor of the China Securities Regulatory Commission and director of the Inspection Bureau, said that there are some opinions in the market. When it comes to active markets, they believe that market manipulation and insider trading cannot be cracked down; when it comes to boosting investor confidence, they dare not crack down on fraud and counterfeiting. This idea of ​​opposing inspection and law enforcement to market development is wrong and unrealistic. “Activating the market and boosting confidence require a standardized, orderly, fair and just market environment. The work tone of investigating and punishing illegal activities in accordance with the law, maintaining market order, and purifying the market ecology must be adhered to and consistent,” Li Ming said.

Teng Biyan, director of the Office of the Punishment Committee of the China Securities Regulatory Commission, said that the China Securities Regulatory Commission insists on “zero tolerance” to crack down unswervingly, and effectively makes administrative law enforcement “thorny”. In 2023, the entire system concluded more than 350 cases, punished more than 1,000 responsible persons (families), and fined and confiscated more than 6 billion yuan. In particular, financial fraud cases with bad market impact and high social concern, such as the Amethyst Storage case, the Zeda Yisheng case, the Yijian Shares case, and the Qixin Shares case, will be severely punished in accordance with the law, effectively purifying the market environment.

In the next step, the China Securities Regulatory Commission will continue to maintain the main tone of “strict” administrative law enforcement, adhere to “zero tolerance”, anchor “high quality”, and keep a close eye on illegal activities such as financial fraud, fraudulent issuance, and dereliction of duty by intermediary agencies. Strict punishment will not be given, strengthen deterrence to help combat counterfeiting; strictly standardize and accurately enforce laws against market manipulation, insider trading and other behaviors to help maintain fair trading order; actively support criminal justice and civil compensation and other work, and build a “thorny” three-dimensional accountability system , escorting the high-quality development of the capital market.



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