SSE Revises and Releases Interim Regulation on Application and Recommendation for Issuance and Listing of Enterprises on SSE STAR Market
Since the establishment of the SSE STAR Market and the pilot of the registration-based IPO system, the board has adhered to its positioning, to support and attract companies with "hard-technology" to go public. Based on the experience learned from practice, the China Securities Regulatory Commission (CSRC) releases the amended Guideline for Attribute of Sci-Tech Innovation (Soft Operation) today. In the same time, the Shanghai Stock Exchange (SSE) releases the amended Interim Regulation on Application and Recommendation for Issuance and Listing of Enterprises on SSE STAR Market (the Interim Regulation for short).
The Interim Regulation initially released and implemented by SSE in March 2020 specified the standard and requirements for the SSE STAR Market, making them more objective, transparent and easy to implement., The regulation played a major role in facilitating the application and recommendation of issuers and sponsors as well as the listing of quality sci-tech innovation enterprises. Since the opening of the board, the industry concentration effect has gradually emerged. A batch of excellent enterprises and industry benchmarks with "hard technology" and committed to breaking China's bottlenecks have landed on the SSE STAR Market. The industries of new-generation IT, bio-medicine and high-end equipment have clustered, and the integrated circuit companies have constituted a complete and independent industry chain. The bio-medicine field has attracted innovative medicine enterprises characterized by the strong ability of sci-tech research, while the high-end equipment companies have made breakthroughs in several aspects. And leading hi-tech companies in other fields have successively listed on the SSE STAR Market. The construction of the SSE STAR Market has achieved expected effects, and won positive feedbacks from all parties in the market.
Sci-tech innovation is a process with continuous development and the review of high-tech companies calls for constant summary of experience in practices, continuous evaluation and dynamic adjustment. The amendment aimed to focus on the goal of supporting hard technologies, further specify the review indicators of sci-tech innovation attributes and the requirements of application and recommendation, strengthen the responsibilities of issuers and intermediaries, cement the comprehensive judgment and examination, and propel the quality development of the board. The amended Interim Regulation include: classifying the industries of the SSE STAR Market by three categories, namely support, restriction and prohibition, specifying the priority directions of the board, restricting fin-tech enterprises and mode-innovating enterprises, prohibiting the listing of real estate enterprises and those mainly engaged in finance and investment business; adding the proportion of R&D employees as an index for sci-tech attribute to reflect the central role of technological talents in innovation; specifying the requirements of issuers for disclosing technical advancement, technological development trends, industries and indicators as well as the examination responsibility of sponsors, instead of only taking relevant indicators as the reference for decision; specifying that an enterprise's sci-tech innovation attributes should be comprehensively evaluated under the principle of "substance is more important than the form", and the role of the sci-tech innovation consultancy committee should be fully played. For companies that have applied before the release of the amended Interim Regulation, the evaluation of their sci-tech innovation attributes should follow the previous regulation.
Under the leadership of the CSRC, the SSE will adhere to the positioning of the STAR Market, focus on hard-core technologies and information disclosure as the key in review, while strengthening the institutional building to support technological innovation. In addition, the exchange will scrutinize the duties of issuers and intermediaries and build synergy with market participants to cultivate more competitive hi-tech companies with hard-core technologies, so as to better serve the implementation of innovation-driven development strategy.