Rules to ease delisting of stocks
By Maggie Zhang |
April 30, 2012, Monday
|
Print Edition
Print Edition
China yesterday stepped up long-awaited moves to make it easier to delist companies on its two mainland stock bourses, a move applauded by industry watchers as a way to wipe out "trash stocks" and consolidate investor confidence.
The Shanghai Stock Exchange and Shenzhen Stock Exchange both posted planned rules on their websites yesterday, including more delisting triggers for the main board in Shanghai and the main board and SME board in Shenzhen.
The triggers include negative net assets, revenue of less than 10 million yuan (US$1.6 million), no-approval or no-comment from accounting firms, inactive trading or poorly performing prices, or the inability to post an annual report after the suspension of listing.
For instance, companies listed in Shanghai that report two straight years of negative net assets will delist. Or companies reporting four years of annual revenue of less than 10 million yuan will delist in Shanghai.
"Improving the delisting rules will allow capital markets to work more efficiently, improve the quality of listed companies and protect the interests of small investors," the Shanghai exchange said in a statement.
The Shanghai bourse will also create an alert system for firms to warn investors of risks.
The two exchanges are soliciting public opinion on the planned moves until May 20 and a final version will follow, though no d ate was given.
On April 20, a stricter delisting rule for the ChiNext in Shenzhen - China's Nasdaq for start-ups - was put forth and served as a prelude for yesterday's delisting plans for the main boards and SME board.
Zhao Xiaoli, a Shanghai Securities investment consultant, said the new delisting rules are aimed at spurring public companies to improve their operation and pay more attention to their listing status.
The delisting rules come amid China's wider campaign to clean up its stock market. Regulators have already beefed up curbs on insider trading, pushed for more transparency by publicizing companies seeking listing, and urged firms to issue dividends to allow investors to benefit from the growth of the capital market.
On Saturday, the country's stock market watchdog published a new guideline for initial public offerings on the Chinese mainland, which aims to make the prices of new shares to be settled at "more reasonable" levels.
The rule sets out the responsi-bilities of issuers and other parties involved in IPOs and pledges to punish illegal practices.
The Shanghai Stock Exchange and Shenzhen Stock Exchange both posted planned rules on their websites yesterday, including more delisting triggers for the main board in Shanghai and the main board and SME board in Shenzhen.
The triggers include negative net assets, revenue of less than 10 million yuan (US$1.6 million), no-approval or no-comment from accounting firms, inactive trading or poorly performing prices, or the inability to post an annual report after the suspension of listing.
For instance, companies listed in Shanghai that report two straight years of negative net assets will delist. Or companies reporting four years of annual revenue of less than 10 million yuan will delist in Shanghai.
"Improving the delisting rules will allow capital markets to work more efficiently, improve the quality of listed companies and protect the interests of small investors," the Shanghai exchange said in a statement.
The Shanghai bourse will also create an alert system for firms to warn investors of risks.
The two exchanges are soliciting public opinion on the planned moves until May 20 and a final version will follow, though no d ate was given.
On April 20, a stricter delisting rule for the ChiNext in Shenzhen - China's Nasdaq for start-ups - was put forth and served as a prelude for yesterday's delisting plans for the main boards and SME board.
Zhao Xiaoli, a Shanghai Securities investment consultant, said the new delisting rules are aimed at spurring public companies to improve their operation and pay more attention to their listing status.
The delisting rules come amid China's wider campaign to clean up its stock market. Regulators have already beefed up curbs on insider trading, pushed for more transparency by publicizing companies seeking listing, and urged firms to issue dividends to allow investors to benefit from the growth of the capital market.
On Saturday, the country's stock market watchdog published a new guideline for initial public offerings on the Chinese mainland, which aims to make the prices of new shares to be settled at "more reasonable" levels.
The rule sets out the responsi-bilities of issuers and other parties involved in IPOs and pledges to punish illegal practices.
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