Can The Legitimate Interests Of Investors In The Two Tier Market Be Guaranteed?

The executive meeting of the State Council deliberated and adopted the decision to authorize the State Council to adjust the relevant provisions in the implementation of the stock issuing registration system, which is proposed to be submitted to the Standing Committee of the National People's Congress for deliberation.

In view of the registration system hot issues, the SFC pointed out: "it is particularly important to strictly implement the delisting system of listed companies, to implement mandatory delisting of listed companies with fraud and major violations, and resolutely eliminate the market."

In fact, in October of last year, the securities and Futures Commission issued a number of opinions on reforming, improving and strictly implementing the delisting system of listed companies, and began to take effect from November 16th. It has perfected five aspects, namely, improving the initiative delisting system of listed companies, implementing the major mandatory market delisting system, strictly implementing market trading classes, financial mandatory delisting indicators, improving the relevant institutional arrangements related to delisting and strengthening the protection of the legitimate rights and interests of delisting companies, but so far only 4 companies have been delisted.

In the face of the impact of registration system, it is inevitable to strengthen the delisting system, and the improvement of the delisting rate is inevitable. However, the author believes that the key lies in whether the legitimate interests of investors can be effectively compensated. Effective protection is the key to the successful implementation of the delisting system. If we only implement the delisting system rudely, and the legitimate interests of investors can not be effectively guaranteed and compensated, the delisting system will encounter two market objections, which will inevitably encounter tremendous resistance from investors, and the smooth implementation of the delisting system will be very difficult.

This is obviously not compatible with the registration system. According to statistics, about 8% of the companies in the Nasdaq market withdraw from the market every year. About half of them are forced to withdraw from the market. For example, from 1985 to 2008, the NASDAQ has 11820 IPO, but the number of delisting is 12965.

The market rate of the NYSE is about 6%, of which about 1/3 are forced to go out of the market.

The higher delisting rate has strengthened the market's metabolic function, and can also sweep out more inferior companies. Since the end of 2001, the PT Narcissus delisting in China has officially opened the retreat of China's capital market. As of now, there are only 80 listed companies in the Shanghai and Shenzhen two cities "delisting", compared with the number of listed companies listed on the list, the delisting rate in the past 14 years is only 2.8%, and the annual delisting rate is only 0.1%, which is equivalent to that of the US 1/60-1/70..

The study shows: "the Nasdaq stock exchange is the representative."

"Fast forward, fast come out, big go and big out" just adapt to the fierce competition and fast iteration characteristics of innovative enterprises such as the Internet, biomedicine and new energy, while the delisting rate of China's gem is almost zero. Even the listed companies of Wanfu and Haichang have been punished by administrative departments and evaded the penalty of delisting.

Let the delisting system be disgraced.

On the one hand, the IPO dammed lake is very serious in China's stock market. As of December 3rd, the SFC accepted 694 enterprises, of which 58 had been passed, and 636 had not been.

Although it is difficult to determine the specific date, it will soon be unquestionable that the registration system does not mean that the registration of new shares can be listed, and that the expansion of the shares should be accelerated. It is also necessary for the Chinese economy and Chinese finance to accelerate the issuance of new shares, but the market capacity can not expand rapidly in a short time. The only way to deal with this problem is to slow down the new shares and accelerate the delisting. It is impossible to slow down the new stock market. Then it can only accelerate the pace of delisting. From the perspective of capital market structure, there are many zombie companies in China's listed companies, which rely on Non Profits and losses to survive. There are still many financial frauds, which are related to the delisting mechanism in some of the delisting opinions, and they can be ordered to withdraw from the market. There were 616 enterprises that were normally awaiting trial, and 20 enterprises were discontinued, so it was urgent to speed up the issue and resolve the barrier lake.

but

The exchange always has a heart of conscience, always leaving room in the process of law enforcement, instead of delisting by fines or other administrative penalties, which has led to widespread criticism in the market. However, the author feels that the SFC is also suffering. This accusation is standing on the side of the talks without considering the position of the SFC.

Where is the difficulty of delisting system? It is difficult to compensate the investors of the two level market in terms of one word, money and money.

If the company's legal operation leads to losses, it is normal that investors should bear the loss of investors. However, the problem is that some companies are exposed to assets by major shareholders, some are caused by management corruption, some are caused by illegal operations, some are caused by false statements, some are caused by financial fraud, such companies are ordered to withdraw from the market compulsion, and investors in the two level market should be compensated for their investment losses.

Without compensation, the direct delisting is no doubt that the two tier market investors will pay the bill.

It is unfair for investors to undertake the cost of reform.

But the problem is on the above compensation, one is restricted by the litigation mechanism, and China has not yet introduced the class action mechanism, and even has no constructive opinions on the management level, resulting in a high cost of litigation. Secondly, China's judicial imperfection is too much administrative intervention, and the civil compensation is extremely difficult. Three, there are problems in the proof mechanism, and there is no evidence to introduce evidence. The investors have already had huge losses. They also need to spend energy and money to find evidence to prove that they have led to losses due to the reasons of the listed companies. It is a bit difficult to do so. Four, it is difficult to enforce the law. The difficulty in enforcement of the civil compensation has always been perplexing China's civil litigation. Five, the loss of the listed company can not be compensated without any assets.

It is precisely because of various problems that the way of delisting has been strongly opposed by investors and even adopted the right of petition to protect rights, leading to bad social influence. Keeping a shell resource, through reorganization, can enable investors to hope to get new profits and thereby reduce losses. Therefore, the SFC has repeatedly weighed off and repeatedly won the rashly banning the flag of withdrawal from the market, preventing investors from irrational rights protection, and even appearing one-sided accusation and abuse.