The GEM registration system is here! What issues deserve attention? What impact will it bring?
China-Singapore Jingwei client (Wu Yihan) GEM registration system is coming!
News broadcast on April 27 reported that the thirteenth meeting of the Central Committee for Deepening Reform comprehensively reviewed and approved the "Overall Implementation Plan for GEM Reform and Pilot Registration System".
The meeting pointed out that advancing the reform of the GEM and the pilot registration system are important arrangements for deepening the reform of the capital market, improving the basic system of the capital market, and enhancing the function of the capital market. We must focus on creating a standardized, transparent, open, dynamic, and resilient capital market, promote basic system reforms such as issuance, listing, information disclosure, trading, and delisting, and adhere to the development of the GEM and other sectors in a misaligned manner to identify each Orientation, develop their own characteristics, and promote the formation of a moderately competitive pattern that focuses on and complements each other.
According to Li Chao, vice chairman of the China Securities Regulatory Commission, the GEM pilot registration system reform adheres to "one main line, three co-ordination". "One main line" is a stock issuance registration system with information disclosure as the core. The "three co-ordination" includes, one is co-ordination to promote the reform of GEM and the construction of multi-level capital market system; the second is to co-ordinate the promotion of registration system and other basic systems; the third is to co-ordinate incremental reform and stock reform.
New latitude and longitude in the data map
GEM advances the registration system timetable
In fact, since the formal opening of the Science and Technology Board in July last year, the implementation of the registration system on the GEM has been put on the agenda.
The Opinions of the Central Committee of the Communist Party of China on Supporting Shenzhen to Build a Pioneering Socialist Demonstration Zone with Chinese Characteristics, which was released on August 18, 2019, pointed out that it is necessary to improve the ability of financial services to the real economy, study and improve the GEM issuance and listing, refinancing and merger and reorganization systems. Create conditions to promote the reform of the registration system.
On December 28, 2019, Cheng Hehong, director of the legal department of the China Securities Regulatory Commission, said that the registration system was promoted step by step. The securities market has different sectors and different types of securities. It is not possible to implement the registration system objectively in one step. In one go. In accordance with the requirements of the central government on accelerating the pilot registration system for GEM reform, it is stepping up research and advancing GEM reform.
From January 16th to 17th, 2020, the 2020 CSRC System Working Conference put forward six key tasks. The second is to take the reform of the registration system as the leader and make every effort to tackle major reform challenges. Steadily promote the reform of the registration system with information disclosure at its core. Efforts should be made to run the Science and Technology Innovation Board to support and encourage more "hard technology" companies to go public. The GEM reform was steadily launched and the registration system was piloted. Promote the steady implementation of the reform of the New Third Board.
On February 29, the General Office of the State Council issued the "Notice on the Implementation of the Work Related to the Revised Securities Law", stating that the registration system for the public offering of securities will be steadily promoted. The third is to improve the registration procedures for the public issuance of securities.
From March 1st, the new "Securities Law" was formally implemented, clearing the institutional barriers for the GEM registration system test. On the same day, the Shenzhen Stock Exchange said that it will promote the reform of the GEM and the pilot registration system, make full use of the successful experience of the Science and Technology Board, promote the formulation of the overall scheme of the pilot registration system on the GEM, study and improve the system of issuance and listing, and information disclosure, and expand the inclusiveness and coverage of the sector.
These issues deserve attention
However, at present, the specific plan of the GEM to implement the registration system has not been disclosed, and from the details, there are still some technical and market positioning issues that need to be addressed.
The first is how to deal with the GEM companies waiting in line for listing now? According to the data from the China Securities Regulatory Commission, as of April 16, the number of IPO companies in line was 422 (excluding the Science and Technology Board), including 153 main boards, 72 small and medium-sized boards, and 197 GEM boards. After the establishment of the GEM registration system, it remains to be clear whether these nearly 200 companies applying for listing on the GEM will continue to line up.
Liu Zhe, deputy dean of Wanbo New Economic Research Institute, pointed out that compared with the Science and Technology Board, the GEM promotion registration system needs to consider the link between the stock and the new system. The basic system of the registration system, such as listing conditions and registration process, can be copied However, it is not appropriate to adopt a "one size fits all" approach to the promotion method, which should give the market a certain transition period to prevent unnecessary impacts on stock companies and companies that have been prepared for listing according to the original rules. It is recommended to adopt a "gradual" approach to implement the GEM registration system, and set a parallel period of 6 months to 1 year, that is, the approval system and the registration system in parallel. In the first two months of the GEM's promotion of the registration system, new enterprises under review will be accepted. Two months later, no new companies under review will be accepted. Enterprises that have entered the review process may continue to follow the original approval process to the maximum extent Do a good job of linking the inventory under review with the system to avoid unnecessary system costs for the enterprise.
Secondly, how should the GEM and Science and Technology Board, which also implement the registration system, be positioned in the future to achieve better dislocation development?
Shen Wanhongyuan Securities analysts Lin Jin and Peng Wenyu believe that the successful experience of the pilot registration system of the Science and Technology Board can be used for reference, but the listing positioning of the GEM registration system is wider or wider, and the listing standards may reflect the hierarchy. According to the previous statement of the Shenzhen Stock Exchange: "Expanding the Inclusion and Coverage of the Sector", and considering that the establishment of the GEM is to support small and medium-sized innovative growth companies, it is initially expected that the GEM registration system may pay more attention to the growth attributes of companies in terms of listing positioning. Not limited to industry attributes. The threshold for listing may also be differentiated and hierarchical with the science and technology innovation board.
Qian Delong, chief economist of Qianhai Open Source Fund, pointed out to Sino-Singapore Jingwei that the implementation of the registration system on GEM is also to promote the listing of some emerging technology companies: "Overall, the positioning of GEM and Science and Technology Innovation Board has some overlap, but Science and Technology Innovation The board is more focused on technology startups, while the GEM may focus on those companies that have entered the growth stage, and it is more backward in the development stage of the company than the science and technology board, and the investment risk is relatively lower. "
Finally, when will the first batch of companies implementing the GEM registration system be launched? From the perspective of the science and technology board, it took only 220 days from the announcement of the establishment to the official opening of the board.
Yang Delong believes that because of the mature experience of the Science and Technology Board, the registration system of the GEM will be faster than the Science and Technology Board. "It is estimated that the fastest may be implemented at the end of the year, and the latest will not exceed next year."
What will the GEM registration system bring?
Yang Delong believes that the implementation of the registration system on the GEM is conducive to promoting the more active small and medium-cap stocks, and brokerage firms and venture capital companies will obviously benefit from the GEM registration system dividend. In the context of the current negative impact of the epidemic on the economy, promoting the reform of the GEM registration system is conducive to promoting more high-quality emerging technology companies to land on the capital market and further enhance the ability of the capital market to serve the real economy.
Hua Changchun, the global chief economist of Guotai Junan Securities Research Institute, told the client of China-Singapore Jingwei that this move is a clear move after the market-oriented reform of the central government ’s position, and is a concentrated expression of further promotion of market pricing and market allocation of resources in the capital market. , Will greatly promote the development of China's stock market and increase the proportion of direct financing.
In the view of Chen Xin, chief strategy analyst of Anxin Securities, the registration system will bring opportunities for high-tech companies in the industry. The listing requirements under the approval system are biased towards financial standards, thereby rejecting many high-growth technology companies that do not meet profitability standards, such as "BATJ" (Baidu, Ali, Tencent, JD.com), which currently ranks among the top in the Internet industry. ), As well as the rapidly growing companies such as Pinduoduo and Bilibili, none are listed on the A-share market.
"Traditional manufacturing is often easier to meet the financial standards under the approval system because of the simple business model or historical and property rights, but the development prospects and potential of the traditional manufacturing industry are declining. The implementation of the registration system will change the listing standards and will be At this stage, high-tech companies that are not profitable but have good growth and are in the industry's "boom" bring opportunities. The industrial structure of China's A-share listed companies may gradually change to high-growth technology companies. "Chen Guo said. (Sino-Singapore Jingwei app)
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