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Press Conference on December 26, 2014
26-12-2014

At the press conference on December 26, 2014, CSRC spokesperson Zhang Xiaojun updated the press on the progress made at the second Cross-trait Securities and Futures Supervisory Cooperation Conference, announced that the CSRC will release the public feedbacks on the M&A and restructuring of listed companies, officially launched the securities and futures markets integrity record search platform, notified the press of CSRC’s recent enforcement efforts against the use of undisclosed information in trading, and released the “Circular on Issues Regarding the Participation of Securities Trading Institutions in the NEEQ”,  "Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No. 15 – General Provisions on Financial Reports (Rev. 2014)”, "Standards for the Content and Format of Information Disclosure by Companies that Offer Securities to the Public No. 17 – Tender Offer Reports (Rev. 2014)”, and “Standards for the Content and Format of Information Disclosure by Companies that Offer Securities to the Public No. 26 – Major Asset Restructuring of Listed Companies (Rev. 2014)”. Zhang also answered questions from the press.

  

Q1: On December 24, Premier Li Keqiang chaired a State Council executive meeting on further improving the role of the financial industry in facilitating enterprises “going global”. The meeting called for further streamlining of a multitude of review and approval procedures, including those for listing in foreign markets. In addition, we have noticed that the CSRC website has published the updated list of application materials required for obtaining administrative approval for listing of domestic companies in foreign markets. What is the CSRC’s plan regarding the reform of the administrative approval process for listing of enterprises in foreign markets?

  

A: To further deregulate, streamline existing procedures, and transform CSRC’s regulatory role, and to further facilitate domestic enterprises meet their financing needs in overseas markets, assist such enterprises in going global, and promote the sound development of enterprises and real economy, the CSRC has made the following changes to simplify the list of application materials for listing in foreign markets:

  

1. Simplify the review procedure by abolishing financial review for overseas listing and removing financial statements, audit reports and tax return forms from the list of required materials, thus reducing the financial burden of applicants; 2. Remove the previous requirement for proof of environmental impact in accordance with the policy changes of China’s environmental protection authorities regarding the abolition of environmental review for enterprises going public and the abolition of environmental compliance documents; 3. Recently, the CSRC has through its statutory powers approved the applications from the Bank of China Limited and the Industrial and Commercial Bank of China Limited for the overseas offering of preferred shares. To further clarify the requirements on application materials for different types of shares including preferred shares, the updated list stipulates that a general requirement for application materials applies to the overseas offering of different types of shares including common stocks, preferred shares and stock-based derivatives; 4. Consolidate the relevant application documents including resolutions of shareholders meeting and the board of directors, business licence, articles of association, and contact form of applicants and intermediaries; 5. Adopt general requirements for application materials which apply to overseas IPO on both the Main Board and the GEB.

  

After these changes, the number of application documents for overseas IPO is reduced from 13 to 7; and for applicants seeking follow-on offering, that number is down from eight to five. In accordance with the requirements for information transparency, the CSRC has already made the updated list of documents available to the public on its official website. 

  

As the next step, the CSRC will continue to implement the directives issued at December 24 State Council executive meeting on the streamlining of review and approval procedures for listing in overseas markets, further delegating administrative powers and simplifying administrative review procedures, boosting regulatory efficiency, and facilitating domestic enterprises in their direct financing activities in overseas markets.

  

Q2: The Securities Association of China has recently released the “Measures for the Administration of Private Equity Crowd Funding (for Trial Implementation) (Consultation Draft)”, which imposes eligibility criteria on participating investors. Some media believe the wealth requirement set in the criteria to be too high, and therefore is at odds with the nature of crowdfunding. What is the CSRC’s take on this?

  

A: Based on whether the offering is open to the general public, equity crowdfunding can be categorized into private placement to qualified investors and public offering to the general public. The “Measures (Consultation Draft)” recently released by the SAC is a set of self-regulatory rules that applies exclusively to private equity crowdfunding platforms; it aims to regulate and guide the sound development of China’s private equity crowdfunding industry. According to regulatory practices both home and abroad, the qualified investors regime is fundamental to private equity market. In line with conventional wisdom and common practice in the regulation of private equity markets, market entry and suitability criteria for potential investors not only help prevent and control market risks, but also promote innovation and development of the industry. At present, the CSRC is formulating relevant regulatory rules for equity crowdfunding and actively exploring policies for equity crowdfunding through public offering.

  

Q3: The people’s court has made the first instance ruling on Yang Jianbo’s appeal against the CSRC this morning. What is the CSRC’s take on this?

  

A: This morning, the First Intermediate People’s Court of Beijing held a public trial for the administrative litigation filed by Yang Jianbo against the CSRC for the administrative sanctions and market bar imposed on him. The court rejected Yang’s appeal.

  

Due to the serious adverse impact caused by the insider trading case of Everbright Securities on securities and futures markets, as well as the massive losses suffered by investors, especially by small investors, the CSRC took tough enforcement measures and imposed stern sanctions on the relevant parties and responsible individuals. This has demonstrated CSRC’s continued commitment and stance on cracking down on market violations and improper transactions as well as to protecting an orderly market.

  

The CSRC will continue to align its thinking and use its statutory power to carry out its supervisory functions for securities and futures market in accordance with the law, continue to improve its regulatory and enforcement functions, steadfastly crack down on various violations, protect market transparency, equitableness and justice, protect the lawful rights and interests of investors, especially those of small investors, and promote the sound development of the capital market. At the same time, the CSRC welcomes the general public to monitor our enforcement efforts.



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