Opinions of the China Securities Regulatory Commission on Further Promoting the Reform of the New Share Issuance System

In implementing the decision of the Third Plenary Session of the 18th Central Committee of the Communist Party of China to promote the reform of the stock issuance registration system, it is necessary to further promote the reform of the new share issuance system, clarify and rationalize the relationship between the government and the market in the process of issuing new shares, and accelerate the realization of regulatory transformation. Improve the quality of information disclosure, strengthen market constraints, promote market participation and responsibility, and lay a good foundation for the implementation of the stock issuance registration system. The overall principle of reform is: adhere to the orientation of marketization and legalization, comprehensively implement policies, treat both the symptoms and the root causes, further rationalize the operation mechanism of the issuance, pricing, and placement, play a decisive role in the market, strengthen market supervision, maintain market fairness, and effectively protect investment. Especially the legitimate rights and interests of small and medium investors.

 

I. Promote the market-based issuance mechanism of new shares

 

(1) Further advance the prospectus for advance disclosure of the prospectus and strengthen social supervision. After the issuer's prospectus is formally accepted, it will be disclosed on the website of the China Securities Regulatory Commission.

 

(2) After the prospectus is disclosed in advance, the relevant information and financial data of the issuer shall not be changed at will. During the review process, if the information recorded in the issuer's application materials is contradictory, or there are different expressions and substantive differences before and after the same fact, the CSRC will suspend the review and will not accept the relevant sponsors within 12 months. The application for the recommendation recommended by the representative. If the issuer's or intermediaries submits the application documents for issuance and related legal documents suspected of false records, misleading statements or major omissions, they shall be transferred to the inspection department for investigation and investigation, and if they are investigated and filed, the application for approval by the relevant intermediary agencies shall be suspended; the verification shall be true. The issuer's application for stock is no longer accepted within 36 months from the date of confirmation, and the intermediary agency and related parties are held accountable according to law.

 

(3) The stock issuance review is centered on information disclosure.

 

As the first person responsible for information disclosure, the issuer shall promptly provide the intermediary organization with true, complete and accurate financial accounting materials and other materials, and fully cooperate with the intermediary agencies to conduct due diligence.

 

The sponsor institution shall strictly perform its statutory duties, abide by business rules and industry norms, conduct prudent verification of the issuer's application documents and information disclosure materials, supervise the issuer's standardized operation, and verify the professional opinions issued by other intermediaries. Have a continuous profitability, meet the legal requirements to make professional judgments, and ensure that the issuer's application documents and prospectus and other information disclosure materials are true, accurate, complete and timely.

 

Securities institutions and personnel such as accounting firms, law firms, and asset appraisal institutions must strictly perform their statutory duties, verify and verify the relevant business information of the issuer in accordance with the business standards and practice standards of the industry, and ensure the relevant Professional documents are true, accurate, complete and timely.

 

The issuance supervision department of the China Securities Regulatory Commission and the stock issuance review committee shall review the legal compliance of the issuance application documents and information disclosure contents, and shall not judge the issuer's profitability and investment value. If there are violations of the law in the application documents and information disclosure, the relevant parties shall be strictly investigated.

 

Investors should carefully read the information publicly disclosed by the issuer, independently judge the investment value of the enterprise, make independent investment decisions, and bear the risks caused by the changes in the issuer's operation and income after the stock is issued according to law.

 

(4) Within three months from the date of accepting the application documents for securities issuance, the CSRC shall, in accordance with the statutory conditions and legal procedures, make a decision on approval, suspension of review, termination of review, and disapproval.

 

(5) When the issuer issues the new shares for the first time, it encourages the original shareholders who have held shares for three years to transfer some of the old shares to the investors and increase the proportion of the shares that can be circulated by the newly listed companies. After the transfer of the old shares, the actual controller of the company may not be changed. The specific plan for the transfer of old shares should be publicly disclosed in the company's prospectus and issuance announcement.

 

The issuer shall reasonably determine the number of new share issuance according to the amount of funds required for the fundraising project. If the number of new shares is less than the legal listing conditions, the number of publicly issued shares may be increased by transferring the old shares. The funds raised by the new shares will be reduced to the old shares.

 

(6) An enterprise that is applying for an initial public offering of shares may apply for the issuance of corporate bonds first. Encourage enterprises to finance by combining stocks and bonds.

 

(7) After the issuer passes the examination meeting and performs the post-meeting procedures, the CSRC approves the issuance, and the issuer's own point of issue is chosen by the issuer.

 

(8) The validity period of the approval document for the initial public offering of shares is relaxed to 12 months.

 

From the date of obtaining the approval document to the public offering, the issuer shall, in accordance with the information disclosure requirements of the listed company's periodic report, promptly modify the contents of the information disclosure document, supplement the relevant data of the financial accounting report, and update the prospectus for the preliminary disclosure; For subsequent matters, the issuer shall report to the CSRC in a timely manner and provide instructions; the sponsor institution and relevant intermediaries shall continue to perform their due diligence obligations. If the issuer has a major post-meeting event, the CSRC shall decide whether it needs to be resubmitted to the review meeting according to the review procedure.

 

Second, strengthen the fiduciary duty of the issuer and its controlling shareholder

 

(1) Strengthening market constraints on relevant responsible entities

 

1. The controlling shareholder of the issuer, the directors holding the issuer's shares and the senior management shall publicly promise in the public offering and listing documents that if the shares held are reduced within two years after the lock-up period expires, the shareholding price shall not be lower than the issue price; If the closing price of the company's stock for 20 consecutive trading days is lower than the issue price within 6 months after the company's listing, or the closing price of the 6-month period after the listing is lower than the issue price, the lock-up period for holding the company's stock will be automatically extended by at least 6 month.

 

2. The issuer and its controlling shareholder, company directors and senior management personnel shall propose in the public offering and listing documents the plan to stabilize the company's share price when the company's share price is lower than the net assets per share within three years after the listing. The plan shall include the specific measures for starting the stock price stabilization measures. Conditions, specific measures that may be taken, etc. Specific measures may include the issuer repurchasing the company's stock, the controlling shareholder, the company's directors, and senior management personnel to increase the company's stock. The above-mentioned personnel should announce the specific implementation plan in advance when starting the stock price stabilization measures.

 

3. The issuer and its controlling shareholder shall publicly promise in the public offering and listing documents that the issuer's prospectus has false records, misleading statements or major omissions, which constitutes a material and substantial impact on whether the issuer meets the conditions of the law as required by the law. All new shares of the initial public offering will be repurchased according to law, and the controlling shareholder of the issuer will repurchase the original restricted shares that have been transferred. The issuer and its controlling shareholder, actual controller, directors, supervisors, senior management personnel and other relevant responsible entities shall publicly promise in the public offering and listing documents that the issuer's prospectus has false records, misleading statements or major omissions, resulting in investment. If a person suffers losses in a securities transaction, he will compensate the investor for damages according to law.

 

Securities institutions such as sponsor institutions and accounting firms shall publicly promise in public offerings and listing documents that they may cause losses to investors due to false records, misleading statements or major omissions made by the issuer’s initial public offering. The compensation for investors will be compensated according to law.

 

(2) Improve the transparency of the company's major shareholders' shareholding intentions. The issuer shall disclose in the public offering and listing documents the intention to hold shares and the intention to reduce the shareholding of shareholders holding more than 5% of the shares before the public offering. When a shareholder holding more than 5% of the shares is reduced, it must be announced three trading days in advance.

 

(3) Strengthening the constraints on the commitments of the relevant responsible entities. Where the issuer and its controlling shareholder, company directors and senior management personnel make public commitments, they shall simultaneously propose restraint measures when they fail to perform their commitments, and disclose them in public offering and listing documents, and accept social supervision. Stock exchanges shall strengthen supervision and restraint on the performance of public commitments by relevant parties, and take timely supervision measures for non-performance of their commitments.

 

Third, further improve the marketization degree of new stock pricing

 

(1) Reforming the pricing method for new share issuance. According to the provisions of Article 34 of the Securities Law, the issue price shall be determined by the issuer and the underwriting securities company in consultation. The issuer shall negotiate with the underwriter to determine the pricing method and disclose it in the issuance announcement.

 

(2) After the quotation of the offline investors, the issuer and the lead underwriter shall pre-empt the highest quotation in the total purchase amount, and the excluded purchase amount shall not be less than 10% of the total purchase amount, and then negotiate according to the remaining quotation and purchase status. Determine the issue price. Excluded subscription shares may not participate in offline placements.

 

If the number of publicly issued shares is less than 400 million shares, the number of investors providing effective quotations shall be no less than 10, but not more than 20; if the number of publicly issued shares is more than 400 million shares, investors who provide effective quotations shall not Less than 20, but no more than 40. If the total amount of stocks issued under the net is more than 20 billion, investors who provide effective quotations may increase appropriately, but not more than 60. If the number of valid quotations is insufficient, the issue shall be suspended.

 

Give play to the role of individual investors in participating in pricing. The issuer and lead underwriter should allow eligible individual investors to participate in offline pricing and offline placement. A securities company with underwriting qualifications shall pre-determine the conditions for the above-mentioned individual investors and make an announcement to the public.

 

(3) Strengthening the information disclosure requirements of the pricing process. The issuer and lead underwriter shall make an information disclosure document of the pricing process and results and make public disclosure. Before online purchase, the issuer and the lead underwriter should disclose the detailed quotation of each offline investor, including the investor's name, purchase price and corresponding purchase quantity, and the median, weighted average of all offline investor quotes. The median and weighted average of the quoted securities investment funds established by public offering, the determined issue price and the corresponding price-earnings ratio.

 

If the price-earnings ratio of the proposed issue price (or the upper limit of the issue price range) is higher than the average price-earnings ratio of the secondary market of listed companies in the same industry, the issuer and lead underwriter should issue a special announcement on investment risk before the online purchase, indicating that the pricing may be estimated. The value is too high to bring losses to investors, reminding investors to pay attention. The content should at least include:

 

1. Compare and analyze the differences between issuers and listed companies in the same industry and their impact on the pricing of the offerings; draw investors to pay attention to the differences between the prices set and the quotes of offline investors.

 

2. Investors are invited to pay attention to investment risks, prudently judge the rationality of issue pricing, and make investment decisions rationally.

 

Fourth, reform the new stock placement method

 

(1) Introducing the lead underwriters' independent placement mechanism. For stocks issued under the net, the lead underwriters independently choose investors to place the shares among the investors who provide effective quotations. The issuer shall negotiate with the lead underwriter to determine the principles and methods of offline placement and disclose them in the issuance announcement. The underwriters shall place the shares in accordance with the pre-announced placing principles.

 

(2) At least 40% of the shares placed under the net shall be preferentially placed to the securities investment fund established by public offering and the social security fund managed by the social security fund investment manager. If the above-mentioned investors have insufficient effective subscription, the issuer and the lead underwriter may place the placement with other investors.

 

(3) Adjusting the proportion of placement under the net and strengthening the quotation mechanism under the net. If the company's share capital is less than 400 million yuan, the proportion of offline placement is not less than 60% of the number of shares issued this time; if the company's share capital exceeds 400 million yuan, the proportion of offline placement is not less than 70% of the number of shares issued this time. The rest is available for sale to online investors. If the subscription of the established offline placement is insufficient, the issuer shall be suspended, and the issuer and the lead underwriter shall not return the shares online.

 

(4) Adjusting the online callback mechanism under the network. If the online investor's effective subscription multiple is more than 50 times but less than 100 times, it should be returned from the offline to the online, the return rate is 20% of the number of publicly issued shares; the online investor's effective subscription multiple is more than 100 times. The callback ratio is 40% of the number of shares in this public offering.

 

(5) Improve the online distribution method. Investors holding a certain number of non-restricted shares can participate in online purchases. The online placing shall take into account the market value of the non-restricted shares held by the investors and the amount of the purchase funds, and carry out the matching and lottery.

 

Stock exchanges and securities registration and settlement companies shall formulate implementation rules for online placing and regulate online placing. The issuer and the lead underwriter shall formulate specific plans for online placement and announce them in accordance with relevant rules. The plan must specify the maximum number of online purchases per investor, which should not exceed one thousandth of the initial number of shares issued online.

 

(6) Strengthening the information disclosure requirements of the stock placement process. The lead underwriter and the issuer shall prepare the information disclosure documents of the placing procedures and results and make them publicly disclosed. The issuer and the lead underwriter shall disclose the conditions for the participation of the investors in the independent placement and the principle of placing in the announcement; the results of the placement shall be disclosed after the completion of the independent placement, including the name of the investor, the quotation, the quantity of the purchase and the amount of the placement, etc. The underwriter shall state whether the results of the independent placement comply with the pre-announced placing principle; for investors who provide valid quotations but do not participate in the subscription, or the actual number of purchases is significantly less than the number of purchases at the time of quotation, the issuer and the lead underwriter shall be in the placement result. The list is publicized.

 

If the issuer, the lead underwriter, the investors participating in the offline placement, and the relevant stakeholders have an agreement or agreement to maintain the price stability of the company's stock after listing, the issuer shall disclose it in the listing announcement.

 

Fifth, increase supervision and law enforcement, and earnestly safeguard the "three public" principle

 

(1) After signing the counseling agreement related to the issuance and listing, the sponsor institution shall promptly disclose the progress of the counseling work for the issuer on the website of the sponsor institution and the website of the CSRC where the issuer is registered; after the counseling work, the counseling process and content shall be addressed. And the results are summarized and disclosed on the above website.

 

(2) Further improve the quality of information disclosure. Guided by the decision-making needs of investors, improve the content and format of information disclosure, highlight the key points of disclosure, and strengthen the major business and business model of the issuer, the external market environment, business performance, and major risk factors, which have a significant impact on investor investment decisions. Information disclosure requirements. Use plain language to improve the readability of disclosure information, and facilitate the reading and supervision of small and medium-sized investors.

 

(3) Before the issuance of the examination, the CSRC will conduct a spot check on the work papers and due diligence of relevant agencies such as sponsors, accounting firms and law firms.

 

(4) Strengthening the linkage mechanism between issuance supervision and inspection and law enforcement. From the point of time when the application documents are accepted by the government, the issuer and its directors, supervisors, senior management personnel and relevant intermediaries shall bear corresponding legal liabilities for the authenticity, accuracy and completeness of the application documents. If any major suspected violations of laws and regulations are found during the audit, they shall be immediately transferred to the inspection department for investigation.

 

(5) Strengthening the process supervision, behavior supervision and after-the-fact accountability of new share issuance. The issuer and the underwriter shall not place shares to the issuer, the issuer's directors and senior management, the underwriters and the related parties of the above-mentioned personnel. The issuer and the underwriter shall not take actions to manipulate the price of new shares, black-box operations or other violations of the principles of openness, fairness and impartiality; it shall not take the act of persuading the offline investors to raise the offer but not to distribute the shares to them; Transferring interests or seeking illegitimate interests to other relevant stakeholders in the form of holding, trust and shareholding