Shanghai and Shenzhen Stock Exchanges Revise Delisting Rules
ISSUING AUTHORITIES:
Shanghai Stock Exchange, Shenzhen Stock Exchange
DATE OF ISSUANCE:
December 31, 2020
EFFECTIVE DATE:
December 31, 2020
On December 31, 2020, the Shanghai Stock Exchange and Shenzhen Stock Exchange issued a series of revised rules, including the Rules Governing the Listing of Stocks on Shanghai Stock Exchange, the Rules Governing the Listing of Stocks on Shenzhen Stock Exchange, the Implementation Measures Governing the Re-listing of Delisted Companies on Shanghai Stock Exchange, etc. (hereinafter collectively referred to as the “New Delisting Rules”). The New Delisting Rules took effect on the date of issuance.
Specific amendments to the delisting criteria and procedures are stipulated by the New Delisting Rules.
Regarding the delisting criteria, the delisting circumstances are categorized into four types of mandatory delisting indicators, including trading, financial affairs, compliance and major violations.
First, in the category of trading indicators, the original rule based on the par value is replaced by the indicator that “the daily closing price of its stocks are lower than RMB 1 for 20 consecutive trading days” (“one-yuan delisting”). In addition, the following new indicator has been added: the total market capitalization value of the shares on the Exchange at closing each day is less than RMB 300 million for 20 consecutive trading days.
Second, in the category of financial affairs a combined indicator is introduced, where the net profit is negative either before or after deducting non-recurring gains and losses, and at the same time the operation revenue is lower than RMB 100 million. Additionally, the financial indicators shall be cross-applied in the following year.
Third, in the category of compliance indicators, new indicators are provided: where serious defects are found in information disclosure or standardized operation, or where over half of the directors cannot guarantee the authenticity, accuracy and completeness of the semi-annual or annual reports disclosed by the company.
Fourth, a new delisting category of major violations is introduced in the revision.
In addition, the former delisting procedures of listing suspension and listing resumption are cancelled, and the transaction time limit of the delisting arrangement period is shortened from 30 trading days to 15 trading days. Overall, the delisting process is greatly simplified.
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