SSE Issues Measures for Transfer Listing of Companies from NEEQ to SSE STAR Market (for Trial Implementation)

26 Feb 2021

In order to specify and implement the institutional arrangements for transfer listing in the Guiding Opinions of the China Securities Regulatory Commission on the Transfer Listing of Companies from the National Equities Exchange and Quotations (the “Guiding Opinions on Transfer Listing” for short), regulate the transfer listing of relevant companies to the STAR Market, and achieve effective transition between the systems, with the approval of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) today issued and implemented the Measures for Transfer Listing of Companies from the National Equities Exchange and Quotations to the SSE STAR Market (for Trial Implementation) (the “Measures for Transfer Listing” for short).

Smoothing the transfer mechanism and forming a multi-level market system with market differentiation, complementary functions, and organic connections is one of the specific measures to implement the important deployment of the CPC Central Committee and the State Council for the high-quality development of the capital market during the “14th Five-Year Plan” period, and plays a significant role in increasing the proportion of direct financing and supporting the growth of high-quality SMEs.

With the coordination and guidance of the CSRC, the SSE has organized the formulation of the Measures for Transfer Listing to implement the Guiding Opinions on Transfer Listing. In accordance with the guidelines of taking a market-oriented approach, coordinating and balancing, trying out pilot projects, and preventing and controlling risks, based on the business logic that the transfer companies have been quoted on the Select Layer of the National Equities Exchange and Quotations (NEEQ) without the need to issue shares, the SSE has designed simple and efficient requirements for and procedures of transfer, and will make effective efforts in the institutional and regulatory transition.

First, clarify the requirements for transfer. In accordance with the market orientation and the fact that the transfer companies have gone through public offering and trading, it is stipulated that the companies transferring to the STAR Market should be in line with the positioning of the STAR Market and meet the requirements for IPO and listing on the board, including in compliance, number of shareholders, cumulative trading volume, shareholding ratio of public shareholders, market capitalization and financial indicators, etc. The transfer companies should be those that have been quoted continuously on the Select Layer of NEEQ Co., Ltd. for more than one year without the circumstances where they should be removed from the Select Layer.

Second, improve the review procedures. Since transfer listing is a move to change the venue of stock trading and does not involve public offering of shares, and the transfer companies have been supervised continuously and have the foundation for regulated operations, the time limit for the review of transfer listing has been reduced from 3 months for the initial public offering to 2 months, so as to improve review efficiency. Also clearly specified are the main procedures of the review for transfer listing such as application acceptance, review inquiries, and deliberation and decision-making, as well as the application documents and the sponsorship arrangements for transfer listing, so as to provide clear expectations for the market. Based on the rules for and practices in the issuance and listing review under the registration-based issuance system, the SSE will achieve effective transition of the review systems, and urge the transfer companies, sponsors and other entities to fulfill the obligation of information disclosure and improve the quality of information disclosure.

Third, arrange for the transition of systems. Firstly, the transfer listing procedures are stipulated. The SSE’s decision to approve transfer listing shall be valid for 6 months starting from the date it is made, and the transfer companies shall complete the preparations for transfer listing and apply for the listing of stocks on the STAR Market within the validity period of the decision. The relevant procedures for listing and continuous regulation shall be governed by the provisions on initial public offering and listing in the Rules of Shanghai Stock Exchange for Stock Listing on the Science and Technology Innovation Board. Secondly, the transition of the restrictions on the sale of shares is stipulated. According to the Guiding Opinions on Transfer Listing, it is made clear that the sales limit period for the shares held by the controlling shareholders, de facto controllers, directors, supervisors and senior executives of the transfer companies shall be 12 months; the shareholding reduction conducted by the controlling shareholders and de facto controllers within 6 months after the expiration of the sales limit period shall not lead to a change in the control of the company; and the arrangements for sales limit and shareholding reduction for core technicians and companies not yet making profits shall be consistent with those for IPO companies. Thirdly, the transition of trading systems is stipulated. It is clarified that the opening reference price of a transfer company on the first day of listing shall in principle be the closing price of its shares on the NEEQ on the last day when trading did occur, and other trading arrangements shall be subject to the provisions of the SSE on companies listed on the STAR Market.

In the earlier solicitation of opinions, the market generally acknowledged the ideas and institutional arrangements in the Measures for Transfer Listing, and put forward suggestions on improvement. After careful research and discussion, the SSE has fully absorbed reasonable and feasible suggestions, such as extending the time allowed for a transfer company to reply to review inquiries from 2 months to 3 months, so as to enhance the inclusiveness of the system.

Going forward, the SSE will further refine the supporting systems for transfer listing, advance the smooth implementation of transfer listing, improve the inclusiveness and coverage of direct financing, strengthen the capacity of financial services to support the real economy, and form the synergy of coordinated development in the multi-level capital market.

Attachment: Notice of Issuing the Measures for Transfer Listing of Companies from the National Equities Exchange and Quotations to the SSE STAR Market (for Trial Implementation)