Panorama Of Regulatory Innovation Of Listed Companies In Shenzhen Stock Exchange: Stock And Increments And Optimization Of Rules And Regulations

Looking back to the past 2019, the Shenzhen Stock Exchange has made remarkable progress in implementing the reform task through the supervision system innovation.

Promote the merger and reorganization of the market reform landing, help deregulation of the gem backdoor and refinancing, the introduction of Shenzhen Shenzhen first derivative 300ETF options, the implementation of A shares the first major illegal delisting, etc., constitute the Shenzhen Stock Exchange listed company supervision in promoting the key system innovation landing 2019 panorama.

Behind the implementation of this series of key reforms, two key points are embodied: first, the optimization of stock policy, such as the innovation of merger and reorganization and refinancing system, and the comprehensive combing and integration of the rules and regulations of self regulatory system; two, the steady implementation of incremental reform, such as the first convertible bond issuing as a restructured payment instrument, and the introduction of 300ETF options.

It is worth noting that the concept of "equal emphasis on increment and stock and steady progress in key institutional innovation" is crucial to the next reform of the Shenzhen Stock Exchange.

On the evening of December 31, 2019, in the new year's address, the Shenzhen Stock Exchange stressed: "in 2020, we will study and implement the new securities law, promote the implementation of a comprehensive deepening of the capital market reform, and strengthen the improvement of the capital market infrastructure system". And in promoting the reform of gem registration system and other important reform proposition, incremental and stock reform go hand in hand is undoubtedly the key question, how to solve problems next, regulators have accumulated experience.

Raising the proportion of direct financing

One of the key reform themes of the Shenzhen Stock Exchange in 2019 is nothing more than deregulation, refinancing and quickening the market reform of mergers and acquisitions. The heavy introduction of these two policies has greatly increased the proportion of direct financing and promoted the real economy of financial services.

In November 2019, the refinancing of gem was loosening up: the conditions for issuing 2 consecutive years of stock issuance were abolished, and the price fixing mechanism was shortened from 36 months to 12 months to 18 months and 6 months, and was not restricted by the reduction rules. The validity period of the gem was extended from 6 months to 12 months, and the open arrangement of non-public offering was optimized to support the introduction of strategic investors by listed companies.

"Previously, the refinancing function of gem should be further developed. The reasons include refinancing conditions which restrict the equity financing of some companies, while companies with high asset liability ratio need to carry out equity financing. From this perspective, we should relax the financing conditions." A well-known brokerage investment bank of China pointed out.

On the other hand, we hope that through the capital market, industrial integration, bigger and stronger listed companies will also have a long drought.

In October 2019, the new rules came into being. The changes of the merger and reorganization rules focused on the level of backdoor listing, including simplifying the standard of reorganization and listing, eliminating the "net profit" index, allowing the high-tech industries and emerging industries related to the national strategy to be reorganized and listed on the gem, and restoring the listed and supporting financing.

Subsequently, the Shenzhen Stock Exchange carried out a series of efforts to promote orderly implementation, and the M & a market was remarkably active. In 2019, the Shenzhen listed company completed 97 reorganizations, involving an amount of 450 billion 200 million yuan. Among them, the Shenzhen private holding listed company implemented 72 mergers and acquisitions, and the transaction amount was nearly 335 billion 700 million yuan.

"After two or three years of training in the capital market, Chinese enterprises have become more pragmatic. Not only what kind of help can be brought about by financing, but also what kind of growth space the exchange and listing sectors can bring to enterprises." Shanghai PE people said. Mergers and acquisitions is undoubtedly an important way for listed companies to break through the ceiling and reach another high ground.

It is worth mentioning that in the process of promoting the reform of mergers and acquisitions, the Shenzhen Stock Exchange has also helped to create an innovative M & a payment tool.

Up to now, a total of 23 Shenzhen listed companies have disclosed a reorganization plan involving directional convertible bonds as payment instruments. In December 3, 2019, the new GEM listed company has just completed the first issue of A convertible bond purchase assets registration.

Analysts at the Tien Capital Research Institute pointed out: "in the transaction process, for the counterparties, the biggest advantage of the directional convertible bonds is that they can be chosen. Whether the shares are transferred or not, the right to choose belongs to the counterparty. If the listed company's stock price is not good enough, the counterparty can choose not to transfer shares and get the cash consideration. If the listed company's share price exceeds the initial share price, the counterparty can choose to transfer shares and get an upward elastic return.

Activate market ecosystem

In addition to vigorously improving the proportion of direct financing, the activation of market ecology is also one of the important themes of the Shenzhen Stock Exchange's institutional innovation.

Throughout the 2019, whether it is strictly implementing the delisting system, purifying the market ecological environment, introducing the Shanghai and Shenzhen 300ETF options, expanding investment varieties, or comprehensively combing the rules of integration system and optimizing the supply of the system are all important measures for the Shenzhen Stock Exchange to activate the market ecosystem.

The first is to explore innovative and diversified delisting. In January 2019, the Shenzhen Stock Exchange made the decision on the mandatory delisting of Changsheng biological stocks. Since then, the first major mandatory delisting unit in the A share market was born.

It was also in this year that in order to improve the quality of listed companies and gradually realize the rule of law, marketization and normalization of delisting, the Shenzhen Stock Exchange made a decision to terminate the listing according to the regulations of 7 companies that touched the conditions of compulsory delisting. 4 of them were triggered by the withdrawal of the value due to the loss of continuous operation capability, the heavy difficulty of corporate governance and many major violations.

In addition, the Shenzhen Stock Exchange also strongly supports the withdrawal of listed companies through merger, reorganization, listing, clearing asset replacement, and active delisting.

Moreover, it is to increase product supply and provide investors with more effective risk management tools. In December 23, 2019, Shenzhen and Shenzhen first derivatives - Shanghai and Shenzhen 300ETF options successfully traded. Since then, the market has only 50ETF options, and the varieties are relatively single, so there are not many ways for investors to choose.

From the point of view, the Shanghai and Shenzhen 300 index is the core broad base index of China's A share market, and the index stock market value is about 30 trillion yuan, accounting for about 60% of the total A stock market value. The asset size of the Shanghai and Shenzhen stock index 300 is more than 150 billion yuan.

Wang Jianjun, general manager of the Shenzhen Stock Exchange, has said that the listing of Shanghai and Shenzhen 300ETF options is of great significance for the Shenzhen Stock Exchange to enhance the function of "three in one" platform for direct financing, asset allocation and risk management, and has added new impetus to the reform and development of Shenzhen stock exchange.

Finally, we should improve the quality of rules and regulations and deepen the rule of law. It is understood that the Shenzhen Stock Exchange launched a comprehensive evaluation and combing of self regulatory rules in 2019. The 80 rules were combed and integrated throughout the year, 57 rules were abolished, two guidelines on information disclosure such as ESOP were released, 18 stock industries were cited and 4 industry guidelines were set up, 11 new business guides were issued.

According to the head of the relevant department of Shenzhen Stock Exchange, we have gradually formed the three level and concise regulatory rules system of listed companies with the guidance of information disclosure guidelines and industry guidelines as the core and business guidance as the supplement.

In the future, with the steady progress of capital market reform, further institutional innovation is still the main line for future Shenzhen Stock Exchange to optimize system supply.

At the moment, the reform of gem is in the process of brewing. This also gives the Shenzhen stock exchange more room to improve its innovative capital formation mechanism, implement the innovation driven development strategy, and serve the economy with high quality development.

The responsible persons of the relevant departments of the Shenzhen Stock Exchange pointed out: "next, the Shenzhen Stock Exchange will continue to take risk prevention as the guidance, improve the quality of listed companies as the core, serve the real economy as the source, strengthen the risk prevention and control and information disclosure supervision of high-risk companies and high-risk areas, and continue to promote the evaluation and optimization of self-regulation rules system, and strengthen the basic system construction."