Improvement Of Delisting Under The Background Of Registration System Reform

With the overall implementation of registration system reform and experiment of Stocks on the Science and Technology Innovation Board of Shanghai by Shanghai Stock Exchange,the innovation of registration system reform immerses into every aspects.As for registration system reform,it is not only amendment from approval to register in public offering,but also impact on other relevant systems such as information disclosure and protection of investors.As for delisting system,the latest China Securities Law and rules of governing IPO of Science and Technology Innovation Board refresh certain delisting regulation and there are indeed some improvement.However,there still needs improvement to meet stringent requirement under the background of registration system reform.Strict delisting system is essential for back up regularity of IPO under the background of registration system to meet whole requirement for innovation.Firstly,this article summarizes the institutional norms and empirical experience of the delisting system itself.The delisting system has undergone continuous modification and practice for nearly 20 years.Since the first batch of delisting companies were delisted in 2001,the delisting status of China's securities market has always had problems of very few delistings and concentrated delisting reasons.The delisting implementation is not optimistic,while the delisting cycle is so long and procedures are complicated.From the view of registration system reform,this article summarizes the theoretical background of the registration system and the characteristics of registration system under new Securities Law.The core difference between the registration system and approval system lies in the change in the relationship between government and market.In the registration system,it is not the public authority that decides to list,but the market itself,to decide whether a company is able to list or not,and the ultimate value judgment of the issuer belongs to the market.Under the new Securities Law,the registration system presents the characteristics of issuing conditions focusing on formal review,more simplified issuance processes,and emphasis on information disclosure and investor protection,providing an institutional basis for the normalization of IPOs.In this context,the delisting system is required to strictly control the overall quality of the market,select high-quality companies in the market,and strictly delist conditions.Meanwhile,strong unified implementation is also required to form a strong deterrent to the market.The new Securities Law and the new delisting regulation of Shanghai Science and Technology Innovation Board make up for the original deficiencies to a certain extent.The new design of delisting rules are more operable.The formulation of specific delisting conditions has given the stock exchange to avoid complicated procedures of modifying law.The requirement of delisting conditions is more specific and reasonable.For the four main types of delisting conditions,the requirements are improved and take characteristics of different enterprises into account;for the process of delisting,suspension of listing in the program is removed to simplify delisting process.However,the new delisting system still needs to be improved.For example,specific transaction/financial/standard requirements need to be clarified and detailed and relevant investor protection needs to be strengthened.At the same time,in terms of the delisting system implementation and supervision,there remains to be insufficient for enforcement and too much involvement of local protectionism.Based on comparison of the delisting system in the United States,Japan and Hong Kong China and combination with practical status and rules of the delisting system in China,this article puts forward suggestions for improving the new delisting system in the following aspects: First,at the legislative level,a systematic delisting system needs to be set up,with clear and orderly levels in order to guide stock exchange to formulate corresponding delisting specifications.Two stock exchanges in China shall cooperate with each other for delisting rules;In delisting process,quantitative and qualitative requirement shall be combined to clarify.For finance delisting conditions,the definition of continuous operation ability shall be clear as well as dealing conditions.The identification of qualitative conditions shall be expanded and at the same time,it shall treat differently for various companies;In the process of delisting,voluntary delisting process shall be improved,and companies with special conditions shall have certain cure period and the follow up procedures shall be improved;As for implementation of delisting,supervision and related information disclosure system shall be strengthened.While affirming the self-regulatory supervision of stock exchange,CSRC shall also play its role of administrative supervision;With regard to relevant supporting measures for delisting system,a detailed transfer system shall be established,as well as relevant supporting relief measures such as representative litigation and compensation beforehand to strengthen protection of investors.