Q1: Today, the Shanghai Stock Exchange (SSE) released the list of the second batch of enterprises whose applications for listing on the Sci-Tech Innovation Board have been accepted. Can you brief us on the SSE’s arrangements for the follow-up acceptance?
A: With the application of the issuers gradually normalized, the SSE will adopt the approach of “disclosure on acceptance” to promptly announce the progress after the centralized acceptance for the second batch of enterprises. The notice on acceptance and publicity for the companies will be disclosed on the official website of the SSE after the market closing on the day of acceptance.
Q2: The market has been highly concerned about the processes of acceptance and review for the companies. Can you detail the differences between the processes of acceptance and review?
A: The SSE's review for the IPO and listing of the companies on the Sci-Tech Innovation Board mainly includes two processes: acceptance and inquiry for review.
In the acceptance process, only factors such as the completeness of a company’s application documents and the qualification of the intermediary organization are verified. It is equivalent to the applicant's obtaining the “exam attendance docket”, which gives them the right to take the exam but does not ensure they will definitely pass the exam or get good results.
In the second process of inquiry for review, the substantial issues such as whether a company is an enterprise of sci-tech innovation in nature, whether it meets the requirements for the issuance and listing on the Sci-Tech Innovation Board, and whether there is any financial flaw will be settled. The Sci-Tech Innovation Advisory Committee will also provide professional opinions during this process. Special attention will also be paid to the circumstances such as the nature of sci-tech innovation enterprises that the market participants are highly concerned about.
With the information disclosure as the core, the inquiry for review is the "soul" of the reform in piloting the Registration-Based IPO System on the Sci-Tech Innovation Board. The review process is an interaction process where the questions will be raised and answered to enrich and improve the contents of information disclosure; it is also a supervision process which will deter the fraudulent issuance and conduce to the investors’ making investment decisions with sufficient information. The key elements of the entire inquiry process will be open to the whole market. Through the entire inquiry process, investors will have a more thorough understanding of an applying company, and offer a price at which he or she is willing to “buy” the company. This is where the “joint efforts” of public supervision lies.
Q3: So far, the SSE has released the lists of two batches of enterprises whose applications for listing on the Sci-Tech Innovation Board have been accepted. The market has extensively discussed the contents of sci-tech innovation of these enterprises. What is the SSE’s opinion on it?
A: We have already noticed that since the release of the first batch of acceptance letters, the market participants have conducted in-depth discussions and analysis on the contents of sci-tech innovation in those accepted enterprises.
We believe that the discussions will help to form a market environment in which all participants perform their duties diligently in accordance with the law, and will also facilitate the SSE’s follow-up review. It should be pointed out that the SSE will conduct many rounds of inquiries on the issues such as the representativeness of sci-tech innovation, technical capabilities, and company quality that are widely concerned in the market during the inquiry for review, so as to form the market-based constraints on the pricing, issuance and listing of the companies through sufficient information disclosure. The issuers shall disclose the information in a true, accurate and complete manner, and the sponsoring institutions shall fully demonstrate whether the issuers conform to the positioning of the Sci-Tech Innovation Board.
Launching the Sci-Tech Innovation Board and piloting the Registration-Based IPO System is an important task assigned by the CPC Central Committee and the State Council to the capital market. It is also a "reform experiment field" for improving the basic system of the capital market based on the "emerging and transitional" characteristics of China's capital market. The SSE will adhere to the direction of market oriented and law-based reform, strictly follow the prescribed conditions and procedures, make effective efforts in all the processes such as application acceptance, inquiry for review and the deliberation of the listing committee, tighten the responsibilities of the intermediaries, and especially require the sponsors to accurately grasp the positioning of the Sci-Tech Innovation Board. We will make persistent efforts and live up to expectations.