Selected Layer "Relay" Ke Chuang Plate: Registration System Incremental Reform "Double Line Operation" Road Map Effluent

The selection of new three boards is becoming another test field for registration reform.

According to the draft opinion issued by the SFC recently on the guiding opinions on the transfer of listed company's share transfer system to the SME share transfer system (hereinafter referred to as the "opinion"), the relevant opinions of the new three board listed company listing to the exchange board are clarified.

According to the regulations, if the companies that have been listed for more than one year in a selected layer are satisfied with the listing requirements of the exchange, they will meet the requirements for the listing of the transfer board.

The SFC also made clear that listed company's transfer of listing does not necessarily involve IPO, which means that the "bundling" relationship between IPO and listing is being lifted in an innovative way.

In the view of the industry, the transfer board mechanism is clear, so that the new third board selection layer has become a new registration system "incremental reform entrance" after the creation of the Science Board, while the science innovation board and the new three board will bring the exploration and promotion effect to the registration system reform of the A share market from two angles of top-down and bottom-up.

The selection of new three boards is becoming another test field for registration reform. - Song Wenhui diagram

Listing of transfer boards

The opinion issued by the SFC clarified the way to realize the transfer of new three Board companies.

According to the "opinions", on the basis of respecting the wishes of the enterprises, listed company will allow the listed company to comply with the listing conditions to make the decision of the transfer board independently, and choose the exchanges and plates to be transferred independently.

From the point of view of this mechanism arrangement, the "issuance examination committee level" between the new three boards and the Shanghai and Shenzhen stock exchanges has been further officially broken down, and the multi-level capital market has also ushered in an unprecedented convergence.

"In the past, there was almost no difference between listed company's planning of IPO and non listed company, and even because of the three types of shareholders, some listed company listing was more difficult than non listed company. That is to say, the new three boards did not form a system dividend linked to the A share market, and the market was fragmented." A securities broker close to the regulatory level said, "but this time, the clear mechanism of the transfer board and the pilot show that the convergence path of the multi-level capital market on the mechanism is formally established."

In fact, due to the lack of the corresponding transfer mechanism in the new three board market, many listed company choose to delisting first and then guide the listing process.

"Before the new three boards and motherboards have no transfer boards, the requirements under the approval system are relatively strict. Some shareholders of the company can not be dealt with at the stage of listing, instead, they need to deal with delisting, and sign the counseling agreement to prepare IPO." The executives said frankly, "this has increased their capital operation costs for some listed company, which is contrary to the idea of developing direct financing and reducing the burden of SMEs."

In the industry view, for the transfer board qualifications, the SFC gives more relaxed conditions than expected.

According to the "opinions", it is clear that the enterprises that apply for the transfer of listed companies should be selected listed company of the new third board, and the companies that have been listed for more than one year in the selection layer and those who intend to transfer the board will meet the listing requirements that are to be transferred to the plate. The industry is terminated on the new third board and traded on the Shanghai Stock Exchange or Shenzhen Stock Exchange. "

More importantly, the "opinion" explicitly listed on the listing process is "a change in the stock exchange, not related to the public offering of shares", without further approval or registration by the SFC, only the Shanghai Stock Exchange and the Shenzhen Stock Exchange examine and make decisions based on the listing rules.

However, the "opinion" also suggested that the exchange could also put forward differentiated requirements according to the regulatory needs. But in the eyes of the insiders, the possibility of setting up the threshold at the exchange level is limited from the subjective demands of the exchanges and the direction of the reform of the capital market.

"As long as we meet the listing requirements of the exchange, and at the same time, we will be able to qualify for the transfer board for a full year, while the plate like the" Chuang Chuang plate "is more market value, which is not difficult for some listed company. An investment bank close to the exchange said, "from the point of view of the exchange, it is certain to be willing to make a big listing market value, and the probability of setting up a threshold for listed company on the basis of the original is not great."

"At present, the IPO of the science and technology board still needs to be registered by the SFC, while the new three board transfer board provides a way to bypass the SFC in the listing link." The former investment bankers close to the exchange pointed out.

Double line operation

The clarity of the transfer board system has further lifted the market's recognition of the new three boards.

On the day of March 9th, the third board market index rose to 1084.79 points, or 0.81%, the highest since May 2017, and it was realized on the trading day when the Shanghai and Shenzhen three major indexes fell by more than 3%.

In the view of the industry, the reform of the new third board selection layer is actually a new entry to the registration system after the founding of the Science Board.

In terms of specific ways, the new three board reform will actually carry out an innovative "decomposition" of the traditional IPO process, and will decompose the two important links of the traditional IPO's "starting" and "listing", that is, the companies that are listed through the transfer board often show the process of first starting and re listing.

"In the traditional IPO mode, the IPO is accompanied by IPO, whether it is the realization of shares, the increase of wealth, or the company's fundraising, which is almost simultaneous, that is, IPO and the listing are tied together." An investment bank in Shanghai explained that, "from the reform of the new third board selection level, regulators are actually taking this step apart. The public offering of the selected level of qualified investors is equivalent to a small IPO, but the company is still a public company after the fundraising, and the subsequent transfer board is the real sense of the listing."

However, under the current institutional arrangement of the selected layer, the approval process of the SFC has not yet been completely circumvent from the new three boards to the listing process. The listed company's application for landing the selected layer and conducting the public issuance of qualifying investors (small IPO) is still required to be approved by the SFC after the approval of the Listing Committee of the stock transfer system.

"The traditional IPO is examined and approved by the securities and Futures Commission of the SFC, and then approved. Small IPO actually took a step forward and transferred the audit authority to the stock market. The SFC only reserves the right of approval." The foregoing Bao Dai pointed out that "from this point of view, the selection of IPO+ transfer board is still limited by the approval system, but it is only one step away from the registration system in form."

In the industry view, the selection of the level of the transfer board and the establishment of the last year since the creation of the board, respectively, from the bottom up, top-down two angles, constitute the registration system incremental reform layout.

The "Chuang Chuang board" is a top-down reform. By setting up a new plate, we select high-quality technology companies to push it inside. The new three boards show a bottom-up feature. Enterprises can gradually transfer from the base layer to the bridge with the selected layer as the bridge. The former securities executives close to the regulatory authorities pointed out that "whether it is a science innovation board or a selection layer, it is actually a newly established platform in the capital market before, and it has the characteristics of incremental reform. Even now the selection of the first tier is still approved, but after a period of reform, registration is just a matter of course."

"Considering the problems such as resistance, adaptability and pilot nature of registration reform, incremental reform is less difficult, less costly, more limited and controllable against the market, and easier to be accepted by the market." The executives said frankly.

In fact, the position of the stock transfer system has also revealed this signal. It will do a good job in landing the registration system of the new three boards, and fully understand and conscientiously implement the registration system in the current work of listing review and issuance of financing review, and do a good job in linking up the procedures of self-examination and administrative licensing.

Pushing up stock speed

It should be noted that if the selected company completes the transfer board, can it be exempted from approval again? The industry believes that this speculation is not difficult to look forward to.

"First of all, Chuang Chuang plate itself is a registered system. Secondly, the first batch of transfer layers should be kept in the two or three quarter of this year at least in the first quarter of the year. The earliest estimate will be in the second half of 2021 to the first half of 2022. A small and medium-sized brokerage investment bank in Beijing predicted that "at that point, the big probability of the gem has completed the corresponding registration system reform."

Judging from this expectation, the listed company will have no difference from the A share company in the capital operation process only if the two steps of the selected IPO+ transfer board are completed.

In the industry, the two reforms of the science and technology board and the selected layer will further promote the stock reform.

"The incremental reform of the Chuang Chuang board and the selected layer will further attract companies to achieve the listing target through this channel, and more enterprises with listed intention will not have to squeeze out the door of the trial committee." The securities executives close to the regulators said, "this will make it difficult for the stock market to absorb more good companies. At the same time, the registration system will bring more supply of new shares, and it will further impact the valuation center of the stock market. The market will make more pricing on the quality of the company instead of the new shares and concepts."

"One of the most direct guesses is that if the selected layer becomes the gateway to the market, it will surely attract more companies to go to the new three boards, instead of going to the issuing committee to submit applications for listing. Besides, some listed company are already coaching on the gem, but they will turn to the selection layer." The executive stressed that "this expected fermentation will lead to the stock market will have to reform and follow up to attract more high-quality enterprises."

In twenty-first Century, the business reporter noted that some listed company were abandoning the original listing guidance scheme instead of IPO. For example, the record guidance information of Jiangsu De Yuan pharmaceutical Limited by Share Ltd shows that its first target segment has shifted from the gem to the new third board selection layer.

At the same time, the corresponding stock reform is also advancing rapidly. In March 1st this year, the Shenzhen Stock Exchange said publicly that it would promote the reform of gem and make a pilot registration system. It should take full advantage of the successful experience of the science and technology board to promote the formulation of the overall scheme of the pilot registration system for gem, and study and improve the system of issuing the market and information disclosure, so as to expand the inclusive and coverage of the plate.

"The market expects the relevant reform ideas and plans of the gem, and there will be a result within this year." According to the previous warranty, "after the successful implementation of the" Chuang Chuang board "in 2019, plus the revision of the securities law, the registration system will be rolled out from the aspects of increment and stock, and the pace of registration reform of the whole capital market will further speed up.

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