On February 1st, the heads of relevant departments of the China Securities Regulatory Commission answered reporters' questions on the comprehensive implementation of the stock issuance registration system.

Q: How to evaluate the effectiveness of the pilot registration system?

Answer: According to the decisions and deployments of the Central Committee of the Communist Party of China and the State Council, the China Securities Regulatory Commission adopts a reform path of pilot first, incremental first, then stock, and gradual promotion. It has successively piloted the registration system on the Science and Technology Innovation Board, the Growth Enterprise Board, and the Beijing Stock Exchange (hereinafter referred to as the Beijing Stock Exchange), promoting a package of reforms and opening up a new situation for the reform and development of the capital market. During the pilot process, we explored and formed three principles for the reform of the registration system: respecting the basic connotation of the registration system, drawing on global best practices, and reflecting Chinese characteristics and development stage characteristics. Overall, the pilot registration system is in line with China's national conditions and has been successful. The main institutional arrangements have withstood market testing, bringing a tangible sense of gain to all parties in the market, and promoting it to the entire market is inevitable.

Main achievements: Firstly, we have explored and formed a registration system structure that is in line with China's national conditions. Especially with information disclosure as the core and the introduction of more market-oriented institutional arrangements, there are no administrative restrictions on the price, scale, and other aspects of new stock issuance, significantly improving the efficiency, transparency, and predictability of review and registration. The second is to enhance the service function for technological innovation. Both the Science and Technology Innovation Board and the Growth Enterprise Board have established diversified and inclusive listing conditions, allowing unprofitable enterprises, special equity structure enterprises, and red chip enterprises to go public, which is in line with the characteristics and financing needs of technology innovation enterprises. In particular, a group of "hard technology" enterprises in the field of "bottleneck" technology research have landed on the Science and Technology Innovation Board, forming industrial clusters in industries such as integrated circuits, biopharmaceuticals, and high-end equipment manufacturing, unblocking the high-level circulation of technology, capital, and the real economy. The third is to promote key institutional innovations such as trading and delisting. There is no limit on the rise and fall of new stocks on the Science and Technology Innovation Board and the Growth Enterprise Board for the first 5 trading days before their listing. Afterwards, the daily rise and fall limit is relaxed from 10% to 20%, and the financing and securities lending mechanism is simultaneously optimized, significantly improving the pricing efficiency of the secondary market. Establish a normalized delisting mechanism, simplify delisting procedures, improve delisting standards, and significantly increase delisting efforts. The fourth is to optimize the multi-level market system. The reform of the registration system is carried out through sectors. In this process, the Shanghai Stock Exchange established a new Science and Technology Innovation Board, the Shenzhen Stock Exchange reformed the Growth Enterprise Board, merged the main board with the Small and Medium Sized Board, and established a selection layer on the New Third Board, followed by the establishment of the Beijing Stock Exchange, establishing a mechanism for board transfer. After the reform, the sector structure of the multi-level capital market has become clearer and more distinctive, and various sectors have strengthened organic connections through IPO (listing), conversion, spin off listing, and mergers and acquisitions. The fifth is to improve the guarantee of the rule of law. The introduction and implementation of the new Securities Law and Criminal Law Amendment (11) fundamentally reversed the situation of low costs of illegal activities. The General Office of the Communist Party of China and the State Council have issued the "Opinions on Strictly Cracking down on Securities Illegal Activities in accordance with the Law", and the "zero tolerance" law enforcement judicial system and mechanism have been continuously improved. The first securities class action lawsuit, the Kangmei case, awarded compensation of 2.459 billion yuan to investors, becoming a landmark event in the history of the rule of law in the capital market. Sixth, it has improved the market ecology. Under the promotion of a series of reform measures, the survival mechanism of the fittest in the capital market has become more perfect, and there have been positive changes in the structure of listed companies, investor structure, and valuation system. The proportion of technology companies and professional institution transactions has significantly increased, and the pricing of new stock issuance and secondary market valuations have shown a trend of high-quality and favorable prices. The market order has become more standardized, and the reverence of issuers and intermediaries towards the market has significantly increased.

Q: What are the arrangements for optimizing the issuance and listing review and registration mechanism in this reform?

Answer: The review and registration mechanism is a key aspect of the registration system reform. In the pilot registration system stage, we explored the establishment of a review and registration structure consisting of two stages: exchange review and registration with the China Securities Regulatory Commission, which is generally in line with China's actual situation. On the basis of fully listening to market opinions, this reform has further optimized the review and registration mechanism for issuance and listing. The overall idea is to maintain the basic structure of exchange review and registration with the China Securities Regulatory Commission, further clarify the division of responsibilities between the exchange and the China Securities Regulatory Commission, and improve the efficiency and predictability of review and registration. At the same time, strengthen the supervision and guidance of the China Securities Regulatory Commission on the audit work of exchanges, and effectively control the entry of the capital market.

In the review process of the exchange: The exchange is responsible for comprehensively reviewing and judging whether the enterprise meets the issuance conditions, listing conditions, and information disclosure requirements, and forming review opinions. During the audit process, if it is found that the project under review involves significant sensitive matters, significant precedents, significant public opinion, or significant illegal clues, it shall be promptly reported to the China Securities Regulatory Commission. The China Securities Regulatory Commission checks whether the issuer complies with national industrial policies and sector positioning.

In the registration process of the China Securities Regulatory Commission: Based on the review opinions of the exchange, the China Securities Regulatory Commission shall fulfill the registration procedures in accordance with the law and make a decision on whether to agree to the registration application of the issuer within 20 working days.

The China Securities Regulatory Commission will transform its functions and strengthen the overall coordination and supervision of the audit work of the exchange. One is to unify audit concepts and standards, and maintain consistent audit standards. The second is to select items under review according to standards or randomly select them in a certain proportion during the exchange's review process, and pay attention to the implementation of the exchange's review philosophy and standards. The third is to urge the exchange to establish a sound "firewall", strengthen internal checks and balances mechanisms such as the quality control department, the Shanghai Municipal Committee, and the Reorganization Committee (hereinafter referred to as the "two committees") to check their responsibilities. The fourth is to conduct regular or irregular inspections on the audit work of the exchange's issuance and listing.

Q: What are the important measures taken in improving the main board trading system during this reform?

Answer: This reform draws on the experience of the Science and Technology Innovation Board and the Growth Enterprise Board, with a more market-oriented and convenient orientation, and further improves the main board trading system. Main measures: Firstly, there will be no limit on the rise or fall of new shares in the five trading days prior to their listing. The second is to optimize the temporary trading suspension system during the trading session. Thirdly, on the first day of listing, new shares can be included in the target of margin trading and securities lending, optimizing the mechanism of refinancing and expanding the scope of securities lending sources.

It should be noted that this reform is based on the actual situation of the main board and has not made any adjustments to the two systems. Firstly, starting from the 6th trading day of the new stock listing, the daily rise and fall limit will continue to remain unchanged at 10%. The main consideration is that from practical experience, the volatility of existing stocks and new stocks on the main board is relatively low from the 6th trading day, and a 10% limit on price fluctuations can meet the pricing needs of the vast majority of stocks. The second is to maintain the current suitability requirements for investors on the main board unchanged, without any restrictions on investors' assets, investment experience, etc.

Investors are reminded that after the reform of the main board, the conditions for issuance and listing have become more inclusive, and there have been changes in issuance pricing and trading systems. We hope that everyone can fully understand these institutional changes and risk points, and make investment decisions prudently.

Q: After the comprehensive implementation of the stock issuance registration system, what measures are arranged for the combination of decentralization and regulation?

Answer: The combination of decentralization and regulation is a necessary part of the reform of the registration system. The overall idea is to strengthen the supervision of the entire process before, during, and after the event, increase the intensity of "management" while "releasing", urge all market entities to return to their positions and fulfill their duties, and create a good market ecology.

At the front end, adhere to the positioning of the sector, compact the responsibilities of issuers, intermediaries, exchanges, and other levels, strictly review and control the quality of listed companies. Implementing a registration system does not mean relaxing quality requirements, it is not for anyone who wants to send it. Especially, it is necessary to make good use of on-site inspection, supervision and other means, adhere to the principle of "declaration is the responsibility", and promptly take measures such as filing for investigation, suspending review and registration, suspending issuance and listing, and revoking issuance and registration if the issuer is suspected of major violations or irregularities. At the same time, scientifically and reasonably maintain the normalization of new stock issuance, maintain the dynamic balance of investment and financing, and promote the coordinated development of the primary and secondary markets.

In the mid-range, strengthen the linkage between issuance supervision and continuous supervision of listed companies, and standardize the governance of listed companies. Strengthen the supervision of information disclosure by listed companies, and further strengthen the responsibility of information disclosure by listed companies, shareholders, and related parties. Smooth multiple exit channels such as mandatory delisting, active delisting, mergers and acquisitions, bankruptcy restructuring, etc., to promote the survival of the fittest for listed companies. Strictly implement the delisting system, strengthen delisting supervision, and improve the mechanism for handling major delisting risks.

On the backend, maintain a "zero tolerance" law enforcement high-pressure situation. Seriously implement the "Opinions on Strictly Cracking down on Securities Illegal Activities in accordance with the Law", establish and improve the law enforcement and judicial system mechanism for strictly cracking down on securities illegal activities, strictly crack down on serious illegal activities such as fraudulent issuance and financial fraud, and hold issuers, intermediaries, and related personnel accountable, forming a strong deterrent.

The China Securities Regulatory Commission will adapt to the requirements of implementing a comprehensive registration system, accelerate regulatory transformation, promote the construction of technology regulation, and effectively improve regulatory capabilities.

Q: What are the arrangements for supervising and balancing the operation of public power under the registration system?

Answer: The essence of the registration system reform is to hand over the right of choice to the market, strengthen market and legal constraints. This is beneficial for the standardized and transparent operation of public power, and for eradicating the soil that breeds corruption from the system. It should be noted that with the extension of the public power chain under the registration system, new risks of integrity have also emerged. The Party Committee of the China Securities Regulatory Commission and the Discipline Inspection and Supervision Group stationed in the commission attach great importance to this, adhere to the principle of answering the same questions and working together, implement strict requirements through a series of institutional arrangements and effective measures, and use strict discipline to safeguard the reform of the registration system.

In terms of reviewing and registering the process, establish an internal control mechanism for hierarchical control and collective decision-making to prevent excessive concentration of power. In particular, it is required that the exchange firmly establish a sense of public power, strengthen the tracking and supervision of audit work by the quality control department, and balance decision-making, reform and improve the composition, term of office, responsibilities, and rules of procedure of the "two committees", raise higher requirements for political quality, professional background, and professional ethics, increase the proportion of full-time personnel, strengthen disciplinary constraints, and effectively play the role of the "two committees" as gatekeepers. Highlight the construction of transparency, make the standards, procedures, content, process, and results of registration review public, accept social supervision, and allow power to operate under the sunshine.

In terms of business supervision, improve the list of rights and responsibilities of the exchange, and establish and improve the internal governance mechanism of the exchange. The China Securities Regulatory Commission strengthens the supervision and assessment of the audit work of the exchange, and urges the exchange to improve the quality of the audit. The China Securities Regulatory Commission will also strengthen the internal audit department's supervision of the issuance and registration business.

In terms of anti-corruption supervision, we will adhere to and improve the close supervision of exchanges and embedded supervision of issuance review and registration, strictly manage review and registration personnel and members of the "two committees", and resolutely crack down on the "revolving door" of government and commerce. We will promote a unified approach that does not dare to corrupt, cannot corrupt, and does not want to corrupt. We will have zero tolerance for corruption in the capital market, and persevere in upholding integrity and discipline.

Here, we also remind market entities such as issuers and intermediaries that the China Securities Regulatory Commission and the exchange adhere to open doors for review, full disclosure, and full supervision. There are no "special channels", and normal communication channels with market entities are open. There is no need to ask for help or find "ways", let alone engage in profit transmission or act as "brokers". The next step will be to establish an issuer's integrity commitment mechanism, deeply promote the construction of intermediary institutions' integrity work, adhere to the joint investigation of bribery and bribery, and make bribery offenders "illegal and restricted everywhere". In this regard, do not have any luck mentality, otherwise you will pay a painful price.

Q: There are many institutional rules formulated and revised in this reform, what are the main considerations?

Answer: The comprehensive implementation of the registration system not only involves the main board of the Shanghai and Shenzhen Stock Exchange, the basic layer of the New Third Board, and the innovation layer, but also involves the Science and Technology Innovation Board, ChiNext Board, and Beijing Stock Exchange that have already implemented the registration system. In terms of institutional rule hierarchy, there are both regulations and normative documents of the China Securities Regulatory Commission, as well as business rules for securities trading venues, securities registration and settlement institutions, as well as specific operational documents such as rule application guidelines and business guidelines. In terms of regulatory content, in addition to IPO, there are also refinancing, mergers and acquisitions, as well as transactions, information disclosure, investor protection, and other aspects. In terms of products, it not only includes stocks, but also convertible corporate bonds, preferred stocks, depositary receipts, etc.

This reform has comprehensively sorted out and systematically improved the relevant system rules based on the experience of the pilot registration system, mainly optimizing and finalizing the effective practices in the pilot stage, unifying the expression of rules, and canceling the words "pilot".