On 29 Apr. 2022, China Securities Regulatory Commission (CSRC) issued the “Guiding Opinions on Improving the Supervision of Listed Companies after Delisting” (《关于完善上市公司退市后监管工作的指导意见》, hereinafter referred to as the “Opinions”), which took effect from the date of issuance.
The number of delisting companies has surged since China reformed its registration-based stock issuance system. By the end of 2021, the number of companies on the delisting board had grown from 45 in 2013 to 83, resulting in huge pressure on the supervision of CSRC.
The Opinions is applicable to companies delisting from all boards of the Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE), and companies directly transferred to the delisting board from the Beijing Stock Exchange (BSE). The delisting companies that were originally traded in the STAQ and NET Systems shall also be subject to routine supervision in accordance with relevant provisions.
The Opinions aim to improve the delisting mechanism and regulation.
It stipulates that after delisting companies go through relevant listing procedures with the help of sponsoring brokers, the stocks of the company shall directly enter the delisting board for transfer according to the regulations of the National Equities Exchange and Quotations (NEEQ), so as to protect investors’ trading rights.
The Opinions also regulates the information disclosure during the delisting period. It requires delisting companies to promptly disclose their progress of listing and other significant matters on the website of NEEQ when their stocks are delisted from Exchanges and enter the delisting board.
Cover Photo by Kale Design on Unsplash
Contributors: CJO Staff Contributors Team