Sino-Singapore Jingwei Client February 29 (Wu Yihan) From March 1, the new securities law will be officially implemented. From the full implementation of the registration system, to the improvement of the investment protection system, and to the changes in the functions and responsibilities of market participants, the new securities law will bring about significant changes to the capital market.
Photo by Xin Jingwei, Dong Xiangyi
Fully implemented step-by-step registration system
The new securities law clearly implements the securities issuance registration system and makes a series of corresponding adjustments and regulations around it.
The main difference between the registration system and the previous approval system is that the conditions for issuing securities have been streamlined and optimized. Under the old approval system, the issuance of stocks should be "with sustainable profitability", while under the registration system, the issuance of stocks should be "with continuous operation ability". This change is also reflected in the issue of corporate bonds. Under the approval system, companies need to issue bonds and have related requirements for net assets, while the registration system has eliminated related requirements for net assets.
In addition, the difference between the registration system and the approval system is that under the approval system, companies that issue securities in China need to be reviewed and approved by the issuance review committee before they can be listed. The new securities law abolished the system of issuance review committees, and stock exchanges can review applications for public offering of securities.
However, this does not mean that starting from March 1, all A-share sections will implement the registration system. The Securities Regulatory Commission previously stated that the new "Securities Law" provides for the registration system for securities issuance and authorizes the State Council to specify the specific scope and implementation steps of the registration system. It is expected that it will take some time for the GEM, especially the main board (small and medium-sized board) to implement the registration system. After the implementation of the new Securities Law, these sections will continue to implement the approval system for a period of time. The relevant provisions of the Law are not contradictory.
Cheng Hehong, director of the Legal Department of the Securities Regulatory Commission, previously pointed out that the registration system is the central policy of the central government, and it is also a clear stipulation of the Securities Law that must be resolutely implemented. There is no doubt about this. At the same time, the advancement of the registration system is also step by step. The securities market has different sections and different types of securities. It is not objectively possible to implement the registration system in one step. This is also a consideration of the addition of this article of the Securities Law to authorize the State Council to make specific provisions on the specific scope and implementation steps of the registration system.
Increasing the cost of violations and establishing class actions
In addition, the new securities law has been improved and revised in a number of areas, such as information disclosure and investor protection, in order to "protect the implementation of the registration system." Among them, increased punishment, increased illegal costs, and the establishment of a representative litigation system have attracted much attention from the capital market.
The first is to increase the cost of breaking the law. In the new securities law, penalties for various illegal acts have been increased. For example, in the case of fraudulent issuance, the penalty from the original maximum penalty of 600,000 (in the case of unissued securities) or raised funds of 5% (in the case of issued securities) is increased to a maximum of 20 million or doubled funds. Fines: For insider trading violations, the fine from the original maximum penalty of 5 times the illegal income is increased to a maximum penalty of 10 times the illegal income.
Ping An Securities pointed out that the amendments to the new securities law significantly increase the cost of violations of laws and regulations in order to reduce the illegal behavior of listed companies and help improve the overall quality of the capital market. Tianfeng Securities pointed out that providing legal guarantees for “increasing the cost of violating the law, increasing the intensity of cracking down on violating the law, and strengthening investor protection” will help reduce market price distortions, improve the quality of listed companies, and increase the attractiveness of the capital market in the long run .
In addition, the new securities law has added a special investor protection chapter, which specifies that investor protection agencies are entrusted by more than 50 investors, can participate in litigation as representatives, and register with people's courts as rights holders confirmed by securities registration and settlement agencies. .
In this regard, Peng Bing, a professor at Peking University Law School and director of the Center for Financial Law Research, believes that this clause is relatively clever. First, in the Civil Procedure Law, an uncertain number of representative actions has been taken, without breaking through China ’s Civil Procedure Law. Secondly, investor protection agencies instead of lawyers dominate the litigation, which greatly reduces the possibility of excessive litigation and premature settlement. "
Clarify the roles and responsibilities of market participants
In addition to the full implementation of the registration system and the improvement of information disclosure and investor protection systems, the new securities law has also provided relevant provisions for changes in the functions and responsibilities of market participants such as regulatory and intermediary agencies under the registration system. .
For the intermediary market, the new securities law has mainly consolidated the legal duties of the "gatekeeper" in the intermediary market. Clearly ensure that the recommender, the underwriting securities company and its directly responsible personnel fail to perform their duties, the presumption of fault for the victim investor, and joint liability for compensation; if the securities service agency fails to perform its due diligence obligations, the maximum fined business income is 10 times If the circumstances are serious, the securities service business shall be suspended or prohibited.
For employees, the new securities law stipulates that during the term of office or statutory period, employees must not hold or buy or sell stocks or other stock-equity securities directly or under a pseudonym or in the name of another person, or accept stocks or other stock-equity gifts from others. Securities of a nature; if securities practitioners hold or buy or sell stocks or other securities of equity nature directly or under a pseudonym or in the name of others, they shall be ordered to deal with illegally held stocks or other securities of equity nature according to law, confiscate illegal gains, and impose Fines below the equivalent of buying and selling securities.
For regulators, the new securities law clearly defines the responsibilities of the CSRC for monitoring, preventing, and disposing of securities market risks in accordance with the law; extending the freeze and seizure period of illegal funds and securities by the CSRC in law enforcement; The system of adopting supervisory measures to maintain market order; the administrative reconciliation system, the securities market integrity file system have been added, the securities market banning system has been improved, and it has been stipulated that subjects banned from entering the market shall not engage in securities trading within a certain period of time.
In addition, the new securities law has also improved and revised the implementation of the decentralization service policy and the cancellation of a series of related administrative licenses; the expansion of the scope of the securities law; and the establishment and improvement of a multi-level capital market system.
Institutions: New Securities Law Will Stimulate Capital Market Vitality
As the new securities law is about to be implemented, on the evening of February 28, the Shanghai and Shenzhen Stock Exchanges and the national stock transfer system issued notices on conscientiously implementing the new "Securities Law" to do a good job of information disclosure for listed companies. There are ten aspects such as the duties of director and supervisor, disclosure of major events, and voluntary disclosure of information.
As for the implementation of the new securities law, many institutions have also expressed their views.
Zhongshan Securities Chief Economist Li Zhan believes that the biggest impact of the new securities law on the capital market is the clear and comprehensive implementation of the securities issuance registration system, and the requirement to issue stocks has been changed from "having sustainable profitability" to "having sustainable operating capabilities". It also drastically simplified the conditions for issuing corporate bonds and cancelled the issuance audit committee system. The above changes will help lower the threshold for enterprises to enter the capital market, further increase the degree of marketization of the capital market, and stimulate market vitality.
China CITIC Securities pointed out that the promulgation of the new securities law marks another solid step in the marketization and rule of law of the Chinese capital market. It is expected that the full promotion of the registration system will further stimulate the vitality of the capital market and the implementation of investor protection measures. Will further purify the ecology of the capital market.
Guoxin Securities believes that, as a fundamental act of the Chinese capital market, the amendment of the securities law is related to the ecological environment of the capital market and determines the institutional framework and development direction of the capital market for a long time to come. The amendment has revised and improved the securities issuance system, reform of the stock issuance registration system, increasing illegal costs, strengthening investor protection, strengthening information disclosure, and improving a multi-level asset system. It is expected to fully coordinate government, markets, and enterprises. Relationship with investors. The newly revised securities law has consolidated the long-term development foundation of the capital market. (Zhongxin Jingwei APP)
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