Another Delisting Of The New Third Board: Continuous Supervision And Unilateral Contract Termination Mechanism Is Launched, And Thousands Of Companies With Poor Performance Will Be Forced Out Of The Market

A few days ago, the national stock transfer company revised the work guidelines for continuous supervision, drafted the business guide for terminating the continuous supervision agreement, and simultaneously revised the continuous supervision agreement (template), which was issued and implemented from December 11, 2020.

It is reported that this revision mainly includes three aspects: first, refine the content of continuous supervision, establish the problem list system, and improve the daily communication mechanism between the sponsor securities company and the listed company; second, optimize the verification mechanism of the sponsor securities company, further improve the on-site and off-site verification, strengthen risk control measures, and improve the efficiency and effect of verification; third, establish unilateral termination Continuous supervision mechanism, to clarify the conditions and procedures of unilateral termination of continuous supervision agreement between listed companies and the host securities companies.

The introduction of unilateral termination of continuous supervision mechanism is of great significance to the sponsor securities companies. In the past, the new three board continuous supervision system was implemented, that is, continuous supervision throughout the whole life cycle of listed companies listing on the new third board. After the implementation of the new rules, as long as the conditions are met, the sponsor securities company can unilaterally terminate the continuous supervision agreement. If no other sponsor securities company undertakes the new three board company within three months, the listing of the new third board company will be terminated.

"With the development of the market, there are some new situations in the process of continuous supervision of the sponsor securities companies. For example, some companies in trouble are not willing to take the initiative to delist, so continuous supervision on them not only allows securities companies to provide voluntary services, but also wastes regulatory resources. " According to the requirements of the new regulations, about one fifth of the company's new third board service items can terminate the continuous supervision agreement.

At present, there are 8213 listed companies on the new third board, far more than 4098 listed companies in Shanghai and Shenzhen stock exchanges. Among the companies listed on the third board, there are 37 high-quality selected layers, 1143 innovative layers and 7033 basic layers with different quality. Therefore, the new unilateral lifting of the continuous supervision mechanism is considered by market participants as a forced liquidation of the companies with poor performance in the new third board.

Both the sponsor securities company and the listed company can terminate the contract unilaterally

According to the latest implementation of the continuous supervision guidelines, the sponsor securities companies and listed companies can unilaterally terminate the continuous supervision agreement.

If the sponsor securities company unilaterally cancels the continuous supervision agreement, the following two conditions shall be met at the same time:

First, the listed companies have failed to pay the supervision fees in accordance with the agreement for two years in total, and they have not paid in full after receiving three written reminders from the sponsor securities company since the expiration of the payment period in the second year, and it has been three months since the date of the first reminder.

Second, the sponsor securities company did not take self-discipline supervision measures or disciplinary punishment except oral warning, interview conversation and written commitment required by the national stock transfer company within 12 months before the expiration of the last reminder, or was taken administrative supervision measures or administrative punishment by China Securities Regulatory Commission and its agency.

The reporter of the 21st century economic report has learned that at present, securities companies continue to supervise a listed company, and the market price is about 200000 yuan. However, some listed enterprises with poor sustainable operation ability often default. "The new rules give brokers the right to choose." A person from the investment banking department of a medium-sized securities firm reported that there were also a large number of projects that met the two conditions of the new rules, and there were also listed enterprises that did not pay supervision fees for three years in the service items.

On the other hand, listed companies can unilaterally terminate the continuous supervision agreement, but three conditions should be met at the same time:

First, the listed company has paid the supervision fee according to the agreement, or has paid the supervision fee in full even though it has been in arrears.

Second, due to the continuous supervision, diligence and responsibility of the original sponsor securities firm in the past 12 months, the national stock transfer company has taken self-discipline supervision measures or disciplinary sanctions in addition to verbal warning, interview and written commitment, or administrative supervision measures or administrative punishment by the CSRC and its agencies.

Third, there are other leading securities companies undertaking their continuous supervision work, and they have not been taken self-discipline supervision measures or disciplinary sanctions by the national stock transfer companies in addition to oral warnings, interview talks and written commitments, or administrative supervision measures or administrative penalties taken by the CSRC and its agencies in the past 12 months.

In the past, some new third board companies changed the host securities companies in the process of continuous supervision, and began to transfer to IPO after the change was completed. After the IPO was successfully listed, the securities companies charged considerable underwriting fees, which was very unfavorable to the early service brokers. Industry insiders believe that, according to the new rules, a long-term cooperative relationship has been realized between the host securities companies and high-quality listed companies, attracting enterprises through high-quality service at the front-end, and achieving rich income after board transfer.

20% of projects to be cleared

In fact, since the stock transfer system received listing applications from enterprises nationwide, the number of enterprises listed on the new third board has increased rapidly, reaching a peak of 11600 in 2017. However, after the peak, the number of enterprises listed on the new third board has continued to decline. In 2019, the scale of listing will decline the most, with 1738 down to 8953. Up to now, there are more than 800 delisting companies in the new third board in 2020.

From the perspective of delisting reasons, the highest proportion is that the companies voluntarily apply for termination of listing, accounting for more than 80%; enterprises whose listing has been terminated due to other situations of delisting are the second, about 10%. Another 30 enterprises delisted due to listing on the board, which accounted for the lowest proportion.

Industry insiders said that the new rules are to persuade companies with poor performance to delist, because after the sponsor securities company unilaterally rescinded the continuous supervision agreement, other securities companies could not undertake it.

According to the latest data from the national small and medium-sized enterprise share transfer system, there are 72 new third board market makers at present. Among them, Kaiyuan securities, Anxin securities, Soochow securities, Zhongtai securities and Guorong securities rank among the top five with the recommended number of 562, 334, 318, 314 and 311 respectively.

Many securities dealers have reported that the company has started to count the new third board projects, and about 20% of the projects meet the delisting and delisting conditions. It can be predicted that the new regulations will play a role in the survival of the fittest in the market, forcing companies with poor performance in the new third board to speed up the liquidation.

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