Chapter I General Provisions
Article 1 The Measures are formulated in accordance with the "Securities Law" and the "Co mpany Law" in order to regulate i nitial p ublic o ffering s and l isting on the g rowth e nterprise b oard , promote the development of the enterprises of independent innovation and other growth venture companies , protect investors’ legitimate rights and interests and safeguard public interest s .
Article 2 The Measures apply to i nitial p ublic o ffering s and l isting on the g rowth e nterprise b oard within the jurisdiction of the People ’ s Republic of China.
Article 3 The issuer shall satisfy the issuance conditions stipulated in the "Securities Law" , the "Corporation Law" and the Measure s before a ppl ying for i nitial p ublic o ffering s and l isting on the g rowth e nterprise b oard .
Article 4 Information disclosed by the issuer required by law must be authentic , accura te and complete, and shall not include any false record s , misleading statement s or material omission .
Article 5 S ponsor s and their representatives shall perform their duties with due diligence, keep good faith, earnestly fulfill the obligations of prudent examination and guidance, and be responsible for the authenticity, accuracy and integrity of documents issued by them.
Article 6 Securities service institutions and staff issuing documents for security issuance shall, in line with the business standards and moral standards generally accepted by this industry, seriously perform their statutory duties and be responsible for the authenticity, accuracy and integrity of the documents issued by them.
Article 7 An admittance system that adaptable to the investors ’ risk bearing capacity shall be established on the g rowth e nterprise b oard to fully inform investors of risks in investment.
Article 8 The China Securities Regulatory Commission ( hereinafter referred to as “the CSRC” ) shall, according to law, examine and approve the issuer ’ s application for initial public offering , and supervise the issuer ’ s stock issuance.
Stock exchanges shall formulate business rules according to law, create an open, fair and just market environment and ensure normal operation of the growth enterprise board .
Article 9 The approval granted by the CSRC to an issuer ’s initial public offering of stock based on the application document submitted by the issuer is not a substantial judgment or guarantee of the investment value of the stock or the yield of investors therefrom. After the stock is issued according to law, investors shall bear on their own the investment risks caused by changes in the issuer ’s business operation and income .
Chapter II Issuance Conditions
Article 10 The issuer shall satisfy the following conditions before applying for initial public offering :
(1) The issuer shall be a company limited by shares established according to law, with continuous operation for more than three years.
For a company limited by shares which is totally changed from a limited liability company by converting its net assets value as shown in its account book into shares, the time of continuous operation may be calculated from the day when the limited liability company is established;
(2) Making profit in the recent two consecutive years, with accumulative net profit of not less than RMB10 million in the recent two years and with a continuous growth; or, making profit in the most recent year, with the net profit of not less than RMB5 million, the business income of not less than RMB50 million in the most recent year and the growth rate of business income of not lower than 30% in the recent two years. Net profit shall be calculated on the basis of the amount before or after deducting the excluding extraordinary profit and loss, whichever is sma ller;
(3) The net assets at the e nd of the most recent period shall not be less than RMB20 million, and without uncovered loss; and
(4) The total amount of capital stock after issuance shall not be less than RMB30 million.
Article 11 The issuer shall have paid the registered capital in full amount and have completed the formalities for the transfer of property rights over the assets contributed by the issue r or shareholders as investment. There is no major ownership dispute over the major assets of the issuer .
Article 12 The issuer shall mainly operate one business, with the production and operation activities comply ing with regulations in the laws , administrative r ule s and the A rticles of A ssociation , as well as the national industrial and environmental protection policies.
Article 13 There is no significant change in the major business, directors and senior manage ment of the issue r in the recent two years, and there is no change in the actual controller of the issuer either.
Article 1 4 The issuer shall have a sustained profitability and do not fall under any of the following circumstances:
( 1 ) I ts business mode or product or service structure has changed or is about to change to a large extent, which exerts great adverse influence upon its sustained profitability;
( 2 ) I ts position in the industry or the business environment of its industry has changed or is about to change to a large extent, which exerts great adverse influence upon its sustained profitability;
( 3 ) T here exist risks that great adverse changes would occur in its acquirement or use of such important assets or technologies as trademark, patent, proprietary technology and franchise rights, etc.;
( 4 ) I ts business income or net profit in the most recent year is greatly dependent on any affiliated party or client with many uncertainties;
( 5 ) Its net profit in the latest year is mainly from investment yield beyond the consolidated financial statements; and
( 6 ) O ther circumstances which would exert great adverse influence upon its sustained profitability.
Article 15 The issuer shall pay the tax legitimate ly, and enjoy tax preferences conforming to relevant laws and regulations. The business performance of the issuer shall not be greatly dependent on tax preferences.
Article 16 The issuer shall not have major risks of debt repayment and major contingent issues including guarantee , litigation or arbitration that influence its sustained operation.
Article 17 The issuer ’ s equity is clear, and there is no major dispute over the ownership of the shares of the issuer held by its controlling shareholder and shareholders under the control of the controlling shareholder or actual controller .
Article 18 The assets of the issuer shall be complete, its business, personnel, finance and institution s are independent from each other, and it has a complete business system and the capability of market-oriented independent business operation. It shall have no horizontal competition with its controlling shareholder, actual controller or other enterprise controlled by the actual controller, nor does it have any connected transaction that is obviously unfair or may severely affect the company ’ s independence.
Article 19 The issuer has a perfect corporate governance structure, and has established such systems as the s hareholders' m eeting , board of d irectorate , board of supervisors and independent d irectors , s ecretaries to d irectorate and audit committee according to law. The relevant institutions and personnel can perform their duties according to law.
Article 20 The basic accounting work of the issuer is standardized. Its financial statement is prepared in accordance with the accounting standards for enterprises and other relevant accounting systems and can fairly reflect the financial status, business achievements and cash flow of the issuer in all important aspects. A certified public accountant has issued an auditing report with unqualified opinions for such statement.
Article 21 The issuer ’ s internal control system shall be sound and be effectively implemented , and properly ensure the reliability of financial reports of the company, legitima cy of production and business operation , efficiency and effect of operation. A certified public accountant has issued an internal control verification report with unqualified opinion.
Article 22 The issuer shall have a strict capital management system, and no funds shall be possessed by the controlling shareholder, the actual controller or other enterprises under the control of the controlling shareholder or actual controller by way of loan, repayment of debts for the issuer , advance money for the issuer or other.
Article 23 The A rticles of A ssociation of the issuer shall have already defined the limits of examination and approval authority and deliberation procedure s of outward guarantees, and there shall be no illegal guarantees for its controlling shareholder, actual controller and other enterprises under their control.
Article 24 The directors, supervisors and senior management of the issuer shall understand relevant laws and regulations concerning issuance and listing, learn about the legal obligation s and responsibilities of listed companies and their directors, supervisors and senior management.
Article 2 5 The directors, supervisors and senior management of the issuer shall obtain the professional qualifications regulated by law s , administrative regulations and rules , and do not fall under any of the following circumstances:
(1) Be prohibited by the CSRC from accessing into the securities market and is still within the prohibited period;
( 2 ) Be imposed on an administrative penalty by the CSRC in the recent three years, or has been publicly decried by a securities exchange in the most recent year ; or
( 3 ) . Be suspected of being involved in a crime and a case has been placed on file by the judicial organ for investigation and prosecution for that purpose, or be suspected of being involved in a violation and a case has been placed on file by the CSRC for investigation for that purpose, and there is no express conclusion or opinion yet.
Article 2 6 The issuer and its shareholders have not issued securities publicly or in other ways without approval of legal authorities in the latest three years, or the lawbreaking still last s although they occurred three years ago.
The issue r or any of its shareholders has not publicly issued securities either directly or in any disguised form without approval in the recent three years. Or, if it did publicly issue securities either directly or in any disguised form without approval three years ago, it is not doing it at present.
Article 2 7 Funds raised by the issuer shall be mainly used for its major business and have specific purposes. The amount of funds raised by it and the investment projects shall be suitable for its current production and operation scale, financial status, technical level and management capability, etc.
Article 2 8 The issuer shall establish a system for deposit of raised funds for special purposes , and the funds shall be deposited into the special account determined by the board of directors.
Chapter III Issuance Procedure s
Article 2 9 The board of directors of the issuer shall make resolutions on the specific plan of the shares issuance, the feasibility of the raised funds’ use and other issues that must be confirmed according to law and submit them to the Shareholders ’ Meeting for approval.
Article 30 The issuer’s Shareholders’ Meeting shall make resolutions on the shares issuance, containing at least the following issues:
(1) Varieties and quantities of shares;
(2) Issuance object;
(3) Price range or pricing methods;
(4) Use of the raised funds;
(5) The distribution scheme of the profit carried over before the issuance;
(6) The validity period of the resolution;
(7) The authorization obtained by the board of directors to handle specific issues for the issuance; and
(8) Other issues that must be clearly specified.
Article 3 1 The issuer shall make application documents according to relevant regulations of the CSRC, which shall be sponsored by the sponsor and be submitted to the CSRC.
Article 3 2 The sponsor who sponsors the issuer’s shares issuance and listing on the growth enterprise board shall make due diligence and prudential judgment on the issuer’s growth and give special opinions. The sponsor shall also state the issuer’s innovation ability in the special opinions if the issuer is an independent innovative enterprise.
Article 3 3 The CSR C shall decide whether to accept the application documents or not within five working days upon receiving them.
Article 3 4 After the CSRC accepts the application documents, the issuer’s application documents shall be preliminary examined by the related authorities and be examined by the p ublic o ffering r eview c ommittee of the growth enterprise board .
Article 3 5 The CSRC shall make a decision of approval or disapproval on the issuer’s issuance application and submit relevant documents.
The issuer shall issue shares within six months since the day when it is approved by the CSRC; the approval documents shall be invalid if the issuer fails to issue the shares within six months, and the shares can be issued after the re-approval by the CSRC.
The issuer shall issue shares within six months since the day when it is approved by the CSRC; the approval documents shall be invalid if the issuer fails to issue the shares within six months, and the shares can be issued after the re-approval by the CSRC.
Article 3 6 If an important issue occurs after approval of the issuance application and before the end of shares issuance, the issuer shall postpone or suspend the issuance, report timely to the CSRC as well as fulfill the obligation of information disclosure. If some issues do not conform to the issuance conditions, the CSRC shall cancel the approval.
Article 3 7 If the application of shares issuance is not approved, the issuer can apply again after six months since the day when the CSRC makes the decision of disapproval.
Chapter IV Information Disclosure
Article 3 8 The issuer shall compile and disclose the prospectus according to relevant regulations of the CSRC.
Article 3 9 The content and format of the prospectus of growth enterprise board stipulated by the CSRC is the lowest requirement of the information disclosure. Whether the rules clearly stipulate it or not, any information with great influence on investors’ decisions shall be disclosed.
Article 40 The issuer shall offer the investors the following instructions at an outstanding position in the prospectus: “After the issuance, the shares will be listed on the growth enterprise board which has high investment risk. The companies on the growth enterprise board are characterized by unsteady performance and high operation risk, considerable delisting risk, etc . , so the investors will confront tremendous market risk s . The investors shall fully understand the investment risk on the growth enterprise board and the risk factors disclosed by the company before they make prudential investment decisions.”
A rticle 41 The issuer and all their directors, supervisors and senior management shall sign or seal on the prospectus to ensure authenticity, accuracy and integrity of the prospectus’ content. The sponsor and its representatives of sponsor shall examine the authenticity, accuracy and integrity of the prospectus’ content, and sign and seal on the examination opinions.
The issuer’s controlling shareholder shall give confirmation opinions on the prospectus, and sign and seal on it.
Article 4 2 The financial statement cited in the prospectus shall be valid for 6 months after the expiry day of the most recent period. Under special circumstances, the issuer may apply for reasonable postponement of its validity, but not more than one month at most. The financial statement shall take the last day of a year, half a year and a quarter as the expiry day.
Article 4 3 The prospectus shall be valid for 6 months, which shall begin from the day when it is signed for the last time before the CSRC approves it.
Article 4 4 After the application documents are accepted and before the p ublic o ffering r eview c ommittee examines, the issuer shall disclose the prospectus (application edition) in advance on the websites designated by the CSRC. The issuer can also publish the prospectus (application edition) on the company’s website with the same disclosed content, but not earlier than the disclosure time on the websites designated by the CSRC.
Article 4 5 The prospectus (application edition) disclosed in advance shall not contain the information of issuance price.
The issuer shall offer the following instructions at an outstanding position of the prospectus (application edition) disclosed in advance: “The issuance application of the company has not been approved by the CSRC. The prospectus (application edition) ha s no legal effect of issuing shares, but just for the disclosure in advance. The investors shall make decisions according to the formally announced prospectus.”
Article 4 6 The issuer and all its directors, supervisors and senior management shall ensure authenticity, accuracy and integrity of the content of the disclosed prospectus (application edition) in advance.
Article 4 7 The issuer shall publish the full text of the prospectus on the website designated by the CSRC before the shares issuance, publish an notice in the newspaper designated by the CSRC, and inform the investors of the websites on which the prospectus is published and the access to the documents.
The issuer shall disclose the prospectus on the company’s website no earlier than the publishing date stipulated in the preceding paragraph.
Article 4 8 The sponsor letter for the issuance provided by the sponsor, the documents provided by the securities service institutions and other important documents relevant to the issuance shall be disclosed on the websites designated by the CSRC and the company’s website as reference documents.
Article 4 9 The issuer shall put the prospectus and reference documents in the domiciles of the issuer, the securities exchange on which its shares will be listed, the sponsor, the leading underwriter and other underwriters for public reference.
Article 50 From the day when the application materials are accepted to the day when the prospectus is published by the issuer according to law after approving the issuance application by the CSRC, the issuer and the parties concerned in the issuance shall not propagandize the public offering by means of advertisement and introduction conference, and etc.
Chapter V Regulation and Legal Liabilities
Article 5 1 The stock exchange shall set up system s including the listing, trading and delisting system which are suitable for characteristics of the growth enterprise board , supervise sponsors’ fulfillment of continuous supervisory obligations, and take corresponding measures on acts that violates relevant laws, regulations and business rules of the stock exchange.
Article 52 The stock exchange shall set up a system of market risk alert and continuous investors education which is suitable for characteristics of the growth enterprise board , supervise the issuer’ s establishment of a sound system of protecting investors’ rights and benefits as well as an internal control system of preventing and correcting lawbreaking actions.
Article 53 The CSRC shall take supervision measures of terminating examination and not accepting the issuer’s shares issuance application within 36 months and punish according to relevant regulations of the “Securities Law” under the following circumstances: the issuance application documents submitted by the issuer to the CSRC have false records, misleading statements or major omissions; the ineligible issuer gets the issuance approval by fraudulent means; the issuer disturbs the examination work of the CSRC and the p ublic o ffering r eview c ommittee with improper means; the signatures or seal s of the issuer and its directors, supervisors, senior management , controlling shareholder and actual controller are fabricated or altered; the issuer and the parties concerned in the issuance publicizes the public offering but break the Measures.
Article 54 The sponsor shall be punished according to relevant regulations of the “Securities Law” and the sponsor system under the following circumstances: the sponsor issues the sponsoring letter for the issuance with false records, misleading statements or major omissions; the sponsor disturbs the examination work of the CSRC and the p ublic o ffering r eview c ommittee with improper means; the signatures or stamps of the sponsor and the signature-related personnel are fabricated or altered; the sponsor does not perform other legal duties.
Article 5 5 If the securities service institutions do not act with due diligence and the documents compiled and issued by them have false records, misleading statements or major omissions, the CSRC shall take supervision measures of not accepting special documents of securities issuance issued by relevant institutions within 12 months and special documents of securities issuance issued by signature-related personnel within 36 months and punish according to the stipulations in the “Securities Law”, other related law s , administrative regulations and rules.
Article 5 6 If the issuer, the sponsor or securities service institutions make or issue unqualified documents, alter the submitted documents without authorization or refuse to answer relevant questions raised by the CSRC, the CSRC shall, depending on the seriousness of the above circumstances, take supervision measures such as supervisory conversation and ordering to rectify on relevant institutions and responsible personnel; this shall be filed into credit record and be published; in case of extremely serious offense, a warning shall be imposed on them.
Article 5 7 Under the circumstance that the realized profit in the profit prediction disclosed by the issuer fails to reach 80% of the predicted profit, unless force majeure, its legal representative, certified public accountant issuing the audit report on profit prediction shall publicly explain and make apology at the shareholders’ meeting , and on the websites also in the newspapers designated by the CSRC; the CSRC can warn the legal representative.
If the realized profit fails to reach 50% of the predicted profit, unless force majeure, the CSRC shall not accept the Company’s application for public securities issuance within 36 months.
Chapter 6 Supplementary Provisions
Article 5 8 The Measures will take effect as of May 1, 2009 .
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