Legal Research On Compulsory Delisting Of Listed Companies

By the end of 2016,more than 3000 A-share companies have gone public,but only dozens of companies were forced to delist.Not a few of stocks don’t have investment value.However,these stocks attract and even deceive investors to buy,which undoubtedly wastes scarce financial resources,deprives other economic entities of their development opportunities,and brings the entire stock market deviating from the value evaluation system.However,some listed companies in our country have some accumulated evil practices which are difficult to remove.Other listed companies follow suit.The delisting standards are established while not being put into practice.This makes listed companies easily evade these delisting regulations.As a result,these companies can survive with ease in the stock market,no matter how poor their performance is.Against the background of compulsory institution evolution in our country,government departments have complete control of listing eligibility.In the course of reforming stocks issuance and listing system,central authorities of securities supervision is progressively taking control of securities issuance whereby control the exchange system of the secondary market.The support and encouragement provided by local governments for listed companies have gone beyond the border of administrative power.The function of local governments is taken into the evaluation of listed companies’ value,which affects the value judgments of the market.As for the stock delisting,supervision concept deviation,delisting standards not meeting market requirements and poor implementation of delisting regulations lead to strong delisting resistance in China ’s A-share market.There is an urgent need to return the decision of delisting to the market through system reform stock exchange,as a main self-disciplined supervisor in the market,authorized by "autonomous contract" between exchange members and by the clear stipulation of law,has regulatory power over participators in the securities market.On the issue of listed companies delisting,as a first-line self-disciplined supervisor,stock exchange should have a greater voice and more jurisdiction power.In order to deal with “Market Failure” and to maintain the fairness and honesty of markets,China Securities Regulatory Commission(CSRC)should not rigidly adhere to details of stock supervision,but take a broad view on development of macro market.In contract-governed mode lead by CSRC,on the one hand,it needs to expand CSRC’s rights field of administrative inspection,increasing the investigation and punishment of significant violations of laws.On the other hand,it needs to enhance the initiative and competitive advantages of autonomous contract of markets,forming diversified development model in shanghai and shenzhen stock market.According to the statistics,at present the main reasons for listing companies’ delisting is constant loss and significant violations of laws.Through the comparison of performance of A-shares listed companies,however,the author has found that current delisting criteria cannot comprehensively give the pros and cons of listed companies,delisting standard can’t effectively serve the function of survival of the fittest.According to data collected from punishments of illegal acts of listed companies,listed companies in our country pay very little cost for their illegal acts;the delisting scope of punishment is too narrow in their major violations of laws;the the delisting regulations of major violations didn’t play an effective role in punishment and deterrence.Compared with the delisting standards and regulatory experience of stock markets in the U.S,the regulatory initiative of China’s exchange fall far behind that of New York stock exchange and Nasdaq market.The main reason is the unreasonable division of regulatory power between CSRC and stock exchange.In order to improve and perfect the delisting system,it needs to improve and perfect the existing delisting criteria and introduce more standards comforming to market value judgment.which will fill the vacancy of delisting system,;it needs to ensure the implementation of delisting standards stable and predictable which will exert deterrence of delisting system;it needs to optimize power separation;it needs to increase the right relief system of delisting,and improve and perfect the turnboard mechanism of in multi-level stock market,which will make sure that the company will have more room to survive in the stock market and that multi-channels will be used to solve the problem of listed.