SZSE: Implementing the Delisting System for the ChiNext Board and Improving the Listing Rules of the ChiNext Board (Full Text)

　　Implement the ChiNext delisting system and improve the ChiNext listing rules
　　----The "Shenzhen Stock Exchange ChiNext Stock Listing Rules" (2012 Revision) officially released
　　Today, the Shenzhen Stock Exchange officially released the "Shenzhen Stock Exchange ChiNext Stock Listing Rules" (2012 Revision) (hereinafter referred to as the "ChiNext Listing Rules"), which will come into effect on May 1, 2012.
　　On November 28 last year, the "Proposal on Improving the ChiNext Delisting System" (hereinafter referred to as the "Proposal") was publicly solicited for opinions. The Shenzhen Stock Exchange revised and improved it based on the feedback from all sectors, and the Proposal was officially released on February 24 this year. This revision of the ChiNext Listing Rules mainly implements the content of the Proposal into the specific clauses of the ChiNext Listing Rules, including the following six aspects:
　　First, the ChiNext delisting standard system has been enriched. In the provisions of suspension of listing, the original "negative net assets for two consecutive years" is changed to "the financial accounting report of the most recent year shows that the audited net assets at the end of the year are negative", and the situation of "due to important prior period errors or false records in the financial accounting report, the previous year's financial accounting report is retrospectively adjusted, resulting in negative net assets at the end of the most recent year" is added; in the provisions of termination of listing, "the company has been publicly condemned three times by this exchange within the most recent thirty-six months", "the company's stock closing price has been below the face value per share for 20 consecutive trading days", and "due to important prior period errors or false records in the financial accounting report, the previous year's financial accounting report is retrospectively adjusted, resulting in negative net assets at the end of the most recent two years" are added.
　　Second, the review standards for resuming listing have been improved, fully reflecting the disapproval of resuming listing through "backdoor listing". First, a new condition for "companies applying for resumption of listing after suspension of listing" is added, requiring that the company's main business has not undergone major changes during the suspension of listing and has sustainable profitability. Second, in view of the fact that most of the companies that have suspended listing and resumed listing through "backdoor listing" currently delay the time to maintain their listing status and restructure on the grounds of supplementing materials, the ChiNext Listing Rules clearly limit the deadline for companies to supplement materials in the application for resumption of listing, requiring companies to provide supplementary materials within 30 trading days. After the deadline, the Shenzhen Stock Exchange will no longer accept applications for new materials. Third, it is clarified that companies that have suspended listing due to three consecutive years of losses or retrospective adjustments resulting in three consecutive years of losses should use the lower of net profit before and after deducting non-recurring gains and losses as the basis for judging profitability for resuming listing, so as to prevent the use of non-recurring income to adjust profits to avoid delisting. Fourth, it is clarified that companies that have suspended listing due to three consecutive years of losses and negative net assets at the end of the year must have an audit report with a standard unqualified opinion issued by a registered accountant in the annual report disclosed after the suspension of listing before they can apply for resumption of listing.
　　Third, it is clarified that companies whose financial reports clearly violate accounting standards and do not correct them will be quickly delisted. In order to prevent companies from avoiding the conditions for suspension or termination of listing by having non-standard unqualified audit opinions issued for their financial accounting reports, it is stipulated that if the matters involved in non-standard opinions clearly violate enterprise accounting standards, systems and relevant information disclosure regulations, the company should disclose the corrected financial accounting reports and relevant audit reports within the prescribed period. If the correction is not made within four months from the expiration of the prescribed period, the listing will be suspended; if the correction is not made within six months from the expiration of the prescribed period, the listing will be terminated.
　　Fourth, the disclosure of delisting risk information has been strengthened, and the chapter on "delisting risk warning handling" that is no longer applicable in the original rules has been deleted. While canceling the "delisting risk warning handling" system, in order to timely reveal the company's delisting risk, the ChiNext Listing Rules fully consider the time point when possible delisting risks may occur, and clearly stipulate the time point of the first risk disclosure and the frequency of subsequent risk disclosure for different situations of suspension and termination of listing, requiring companies to disclose a risk warning announcement every five trading days, strengthening the requirements for disclosing delisting risk information.
　　Fifth, relevant provisions on the delisting adjustment period have been added. According to the Proposal, the ChiNext implements the "delisting adjustment period" system and establishes a delisting adjustment board. In the ChiNext Listing Rules, clear provisions are made on the starting time point, duration, daily price limit, separate board display of market information, and risk warnings for the delisting adjustment period.
　　Sixth, it is clarified that ChiNext companies will be uniformly transferred to the OTC market for trading after delisting. In order to protect the interests of investors and provide a suitable trading venue for delisted company stocks, the ChiNext Listing Rules clearly stipulate that ChiNext companies will be uniformly transferred to the OTC market for trading after delisting.
　　Since the launch of the ChiNext in 2009, new problems have continued to emerge in regulatory practice, and relevant laws and regulations have been continuously improved. In response to these changes, the Shenzhen Stock Exchange has also revised and improved some clauses in the original rules that are not suitable for regulatory practice and requirements. The main points include: to improve market efficiency and reduce routine suspensions, canceling the routine suspension on the day of the shareholders' meeting and the one-hour routine suspension on the day of the announcement of abnormal stock price fluctuations. Among them, the routine suspension of stock price fluctuation announcements involves relevant clauses in the Exchange's Trading Rules. The cancellation of the suspension of stock price fluctuation announcements will be implemented after the relevant clauses in the Exchange's Trading Rules are revised; to timely alert companies with negative net assets of the risk of delisting, adding the requirement that companies with negative net assets must issue performance forecasts; to curb the behavior of insiders harming the interests of the company, stipulating that transactions between the company's directors, supervisors and senior management and the company must be reviewed by the shareholders' meeting, and putting forward strict requirements; for projects with raised funds that involve major investments and related party transactions in phased implementation, it is clearly required that the company fulfill its relevant information disclosure obligations.
　　The "ChiNext Listing Rules" (2012 Revision) will come into effect on May 1, and the ChiNext delisting system will be officially implemented.