In the past two months, the central level has repeatedly mentioned improving the delisting mechanism of listed companies, and the establishment of a normalized delisting mechanism has become a top-level design. So, what is the direction of this round of delisting mechanism reform? We can see from the recent high-level statements.
On November 28, Yan Qingmin, vice chairman of the China Securities Regulatory Commission (CSRC), publicly stated that it was necessary to improve the mechanism of regular delisting. For the black sheep of serious financial fraud and the empty shell zombies who lost the ability of sustainable operation, we should strengthen the delisting rigidity and never allow protracted withdrawal. The quality of listed companies can be further improved only if we can really achieve retreat and retreat steadily.
On November 19, sun nianrui, deputy director of the supervision department of listed companies under the CSRC, said at the 2020 Forum on high quality development of listed companies, the CSRC would optimize the delisting criteria and change the single continuous loss delisting index into a composite financial delisting index. According to his introduction, the general idea is not to simply investigate the profitability of enterprises, but to pay attention to the ability of sustainable operation at the same time. The directionality of delisting will also be more in line with the requirements of the registration system. Loss is not the focus of capital market import and export. Delisting supervision will pay more attention to the timely clearance of zombie enterprises and shell enterprises.
Zhu Dongshan, economist of Baoan District Development Research Center of Shenzhen City and doctor of economics of Peking University HSBC business school, said that compared with A-shares, the delisting rate of capital markets in cities such as the United States and Hong Kong is generally at a higher level. Due to the improvement and function of market-oriented mechanism, delisting of enterprises is the normal state of marketization, and the number of delisting is basically the same as that of IPO When.
Li Xunlei, chief economist of China Thailand securities, said that a new round of reform of delisting system will bring far-reaching impact on A-share market. In his opinion, one of the reasons for the better performance of the US stock market is that it is based on the elimination of a large number of companies, and the constituent stocks of the index are selected from the best. In this way, the index will rise more obviously. On the other hand, after the delisting system is improved, the game rules of A-share market have changed, which is conducive to the improvement of valuation structure and correction of valuation system.
Marketization is becoming the mainstream
Since the end of 2018, the market-oriented delisting of Zhonghong shares has gradually become the mainstream. Since 2019, the Shenzhen Stock Exchange has made compulsory delisting decisions on 18 companies, half of which are the result of investors voting with their feet at face value. Over the same period, nearly 20 Shenzhen stock market companies have realized multi-channel exit through bankruptcy reorganization, reorganization and listing, asset replacement, etc., and the role of market mechanism has been constantly playing.
The head of the asset management department of a large listed securities firm said that an important reason for the difficulty in delisting was the resistance from the local government where the listed companies were located. However, this problem has been alleviated after the implementation of the face value delisting. In the process of trading, investors have gradually released the risk by voting with their feet. After a long change of hands, the risk loss of participants is controllable, and the pressure and resistance faced by the government are also reduced.
In the new delisting system, the weight of market indicators such as stock price, number of shareholders and market value should be further strengthened in the new delisting system. Through the market-oriented delisting system, enterprises without market value can be decisively delisted, and the survival of the fittest can be completed by market mechanism. This is also in line with the concept of registration system reform, that is, information disclosure is the center, allowing investors to make investment decisions independently. Its up to investors to decide what kind of valuation to give and whether to stay in this market.
Relevant institutional arrangements have been optimized for the science and technology innovation board and the growth enterprise market. In addition to the well-known closing price lower than the par value for 20 consecutive trading days, the market value of the stock was less than 300 million yuan for 20 consecutive trading days, the number of shareholders was less than 400 for 20 consecutive trading days, and the trading volume of 120 consecutive trading days was less than 2 million shares. With the gradual formation of the market mechanism of survival of the fittest, we can foresee that the market-oriented delisting will play a greater role in the future, and the ability of market environment purification will continue to enhance.
Focus on investor protection
In the process of delisting, it is very important to do a good job of investor protection, especially for listed companies which are delisted due to financial fraud and other major violations.
In his speech on November 28, Yan Qingmin said that in order to improve the adaptability of Chinas delisting mechanism, it is necessary to broaden diversified exit channels through restructuring, restructuring and delisting. In addition, the implementation of the new securities law will promote the representative litigation system of insurance institutions to be implemented through typical cases as soon as possible, so as to realize the dual objectives of market clearing and investor protection.
In Li Xunleis view, for the situation that damages the interests of investors before delisting, the compensation should be compensated, and the money of investor protection fund needs to be fully utilized. In order to avoid unexpected delisting and make investors unprepared, listed companies should fully disclose information so that investors can recognize the possible delisting risks of related companies. Li Jian, a lawyer with Zhejiang Yufeng law firm, said: first of all, he called on the implementation and promotion of supporting rules for delisting system reform as soon as possible, establish a new mechanism of survival of the fittest, and build a new ecology of marketization and legalization delisting. Secondly, we should strengthen the education of investors. Before investing in stocks, investors should keep their eyes open and invest rationally. They should not blindly participate in speculation with old ideas. Source: Securities Times editor in charge: Yang Bin_ NF4368
In Li Xunleis view, for the situation that damages the interests of investors before delisting, the compensation should be compensated, and the money of investor protection fund needs to be fully utilized. In order to avoid unexpected delisting and make investors unprepared, listed companies should fully disclose information so that investors can recognize the possible delisting risks of related companies.