Circular on Issuing the Implementing Measures of the Shanghai Stock Exchange for Compulsorily Delisting Listed Companies with Major Violations
Circular on Issuing the Implementing Measures of the Shanghai Stock Exchange for Compulsorily Delisting Listed Companies with Major Violations
Circular on Issuing the Implementing Measures of the Shanghai Stock Exchange for Compulsorily Delisting Listed Companies with Major Violations
Shang Zheng Fa [2018] No.98
November 16, 2018
Market participants,
In order to further improve the delisting system for listed companies, the Shanghai Stock Exchange (the "SSE") has formulated the Implementing Measures of the Shanghai Stock Exchange for Compulsorily Delisting Listed Companies with Major Violations (the "Measures", as detailed in the Appendix), which provide for the implementing standards and procedures for compulsorily delisting listed companies with major violations, in accordance with the Decision on Revising the Several Opinions on Reforming, Improving and Strictly Enforcing the Delisting System for Listed Companies (the "Decision") issued by the China Securities Regulatory Commission and the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange (Revised in November 2018) (the "Rules"). The Measures, which were adopted by the board of governors of the SSE upon deliberation, and submitted to and approved by the China Securities Regulatory Commission, are hereby promulgated and shall come into force as of the date of promulgation.
In order to properly arrange the connection between the application of old and new rules, and ensure the smooth implementation of the Measures and the Rules and the Measures of the Shanghai Stock Exchange for the Relisting of Delisted Companies (Revised in November 2018) (collectively the "New Rules") revised synchronously, the relevant matters are hereby notified as follows:
I. Before the implementation of the Decision, if a listed company has been identified as committing a major illegal act or transferred to the public security organ in accordance with the law, and is subject to a delisting decision, the original rules shall apply; after the implementation of the Decision, if a listed company is subject to an administrative penalty imposed by the relevant administrative organ or commits an illegal act as identified by an effective judicial judgment, the New Rules shall apply to the suspension or termination of listing of the listed company due to such illegal act, regardless of the timing of the illegal act.
II. Regarding the information disclosure on delisting due to major violations in an annual report specified in Item 3 of Article 4 of the Measures, the year 2015 shall be the starting year for the financial indicators under the delisting circumstance due to the major violations specified in Item 3 of Article 4 of the Measures. In other words, after retrospection, a listed company will be delisted if the financial indicators for consecutive fiscal years from 2015 trigger the standards for the termination of listing.
III. Where a listed company commits major illegal acts before the implementation of the New Rules, but has completed the reorganization and listing and meets all the following conditions, it may apply in writing to the SSE for not compulsorily delisting its shares due to major violations:
1. before the implementation of the New Rules, a listed company has completed the reorganization and listing in a lawful and compliant manner in accordance with the Administrative Measures for the Material Asset Reorganization of Listed Companies, and the major violations occurred prior to and were irrelevant to the reorganization and listing; and
2. the current directors, supervisors and senior officers have not been subject to administrative penalties imposed by the China Securities Regulatory Commission within the last 36 months, and have not been publicly condemned by a stock exchange within the last 12 months.
If a listed company applies to not compulsorily delist its shares due to a major violation in accordance with the provisions of the present article, Article 8 of the Measures shall apply, and a financial adviser and a lawyer shall be appointed at the same time to conduct a review and issue review opinions.
Upon receipt of the above application from the listed company, the SSE will review the application and make the corresponding decision according to the relevant procedures specified in the Measures.
IV.
......
Shang Zheng Fa [2018] No.98
November 16, 2018
Market participants,
In order to further improve the delisting system for listed companies, the Shanghai Stock Exchange (the "SSE") has formulated the Implementing Measures of the Shanghai Stock Exchange for Compulsorily Delisting Listed Companies with Major Violations (the "Measures", as detailed in the Appendix), which provide for the implementing standards and procedures for compulsorily delisting listed companies with major violations, in accordance with the Decision on Revising the Several Opinions on Reforming, Improving and Strictly Enforcing the Delisting System for Listed Companies (the "Decision") issued by the China Securities Regulatory Commission and the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange (Revised in November 2018) (the "Rules"). The Measures, which were adopted by the board of governors of the SSE upon deliberation, and submitted to and approved by the China Securities Regulatory Commission, are hereby promulgated and shall come into force as of the date of promulgation.
In order to properly arrange the connection between the application of old and new rules, and ensure the smooth implementation of the Measures and the Rules and the Measures of the Shanghai Stock Exchange for the Relisting of Delisted Companies (Revised in November 2018) (collectively the "New Rules") revised synchronously, the relevant matters are hereby notified as follows:
I. Before the implementation of the Decision, if a listed company has been identified as committing a major illegal act or transferred to the public security organ in accordance with the law, and is subject to a delisting decision, the original rules shall apply; after the implementation of the Decision, if a listed company is subject to an administrative penalty imposed by the relevant administrative organ or commits an illegal act as identified by an effective judicial judgment, the New Rules shall apply to the suspension or termination of listing of the listed company due to such illegal act, regardless of the timing of the illegal act.
II. Regarding the information disclosure on delisting due to major violations in an annual report specified in Item 3 of Article 4 of the Measures, the year 2015 shall be the starting year for the financial indicators under the delisting circumstance due to the major violations specified in Item 3 of Article 4 of the Measures. In other words, after retrospection, a listed company will be delisted if the financial indicators for consecutive fiscal years from 2015 trigger the standards for the termination of listing.
III. Where a listed company commits major illegal acts before the implementation of the New Rules, but has completed the reorganization and listing and meets all the following conditions, it may apply in writing to the SSE for not compulsorily delisting its shares due to major violations:
1. before the implementation of the New Rules, a listed company has completed the reorganization and listing in a lawful and compliant manner in accordance with the Administrative Measures for the Material Asset Reorganization of Listed Companies, and the major violations occurred prior to and were irrelevant to the reorganization and listing; and
2. the current directors, supervisors and senior officers have not been subject to administrative penalties imposed by the China Securities Regulatory Commission within the last 36 months, and have not been publicly condemned by a stock exchange within the last 12 months.
If a listed company applies to not compulsorily delist its shares due to a major violation in accordance with the provisions of the present article, Article 8 of the Measures shall apply, and a financial adviser and a lawyer shall be appointed at the same time to conduct a review and issue review opinions.
Upon receipt of the above application from the listed company, the SSE will review the application and make the corresponding decision according to the relevant procedures specified in the Measures.
IV.
......