On November 17, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, stated at the Innovation Economy Forum that whether there is a timetable for Ant Group’s listing depends on how the government reorganizes the regulatory framework. The author believes that whether Ant Group has obtained the approval of the China Securities Regulatory Commission to register is still valid. This is a key issue. For this reason, the author sorts out the legal and regulatory issues involved in the registration system.
Review the incident. On November 2, the relevant authorities conducted a supervisory interview with Ma Yun, the actual controller of the issuer, and the financial technology regulatory environment has also changed. Related matters “may” cause the issuer to fail to meet the relevant issuance and listing conditions or letter disclosures on the Science and Technology Innovation Board. Requirement, the Shanghai Stock Exchange made a decision to suspend listing of Ant Group on November 3. The basis for this includes the provisions of Article 60 of the Shanghai Stock Exchange’s “Science and Technology Innovation Board Stock Issuance and Listing Review Rules”, which stipulates that “After the CSRC makes a registration decision and before the stock is listed and traded, major events may occur that may cause the issuer to fail to meet the issuance conditions and list If conditions or information disclosure requirements are met, the issuer shall suspend the issuance; if it has already been issued, the listing shall be suspended.”
As of November 5, Ant Group issued a postponement announcement and returned the subscription funds and interest to investors. The Ant Group announced that it was in order to protect the interests of investors that the issuer and the co-lead underwriters made such a decision; the Shanghai Stock Exchange expressed respect and support for the decision, believing it was a responsible approach to the market and investors. From a legal perspective, the suspension of listing does not necessarily reverse the suspension of issuance and withdrawal. However, Ant Group has just completed the issuance at a price of 68.8 yuan per share. Changes in the regulatory environment may have a significant impact on Ant Group’s business structure and profit model. Of course, it will also have a significant impact on the valuation, so the issue price may be unfair to the purchasers, and withdrawal of shares is indeed a more responsible approach.
According to the announcement, after the postponement of the issuance, the Ant Group will decide whether to restart the issuance based on the full verification and evaluation of relevant post-conference matters within the validity period of the initial registration approval approval. According to Article 25 of the “Regulations for the Administration of the Initial Public Offering of Stocks on the Science and Technology Innovation Board” (hereinafter referred to as the “Measures”), the decision of the China Securities Regulatory Commission to approve the registration shall be valid for one year from the date it is made. Perhaps the Ant Group believes that its registration with the Securities Regulatory Commission is still valid.
However, the author believes that there is another possibility, that is, under the circumstances stipulated in the 24th “Securities Law”, the Securities Regulatory Commission has made a decision on the registration of securities issuance and found that it does not meet the statutory conditions or statutory procedures, and has been issued and has not been listed. In the cancellation of the issuance registration decision, the issuer shall return the securities holders at the issue price plus interest. There are similar provisions in Article 27 of the aforementioned Measures. If the Securities Regulatory Commission finds that the registration of Ant Group does not meet the statutory conditions or legal procedures in the future, even if it has been issued, the Securities Regulatory Commission can also revoke the registration decision, and the return of the share money is more of the meaning of the question.
Before the Securities Regulatory Commission has not withdrawn the registration decision, Ant Group and other parties may believe that the issuance registration should be valid and have a one-year validity period; but whether the Securities Regulatory Commission decides to withdraw the registration decision needs to be renewed under the new “financial technology regulatory environment”. Examine whether the registration of Ant Group meets the legal requirements or legal procedures. If Ant Group, regardless of whether the CSRC has withdrawn the registration decision, after checking and evaluating relevant post-meeting matters, it restarts the issuance after a period of time, is it allowed? There may be gaps in laws and regulations.
The author believes that the issuer should not be allowed to restart the issuance before the CSRC has not made it clear whether to withdraw the registration decision. It is suggested that the “Measures” should supplement the provisions that if major events occur after the meeting, the CSRC should make a decision on whether to withdraw the registration within one month. If the registration is not withdrawn within one month, the original registration decision will still be valid, and the decision will be taken one month later. The time is re-calculated and the registration is valid for 1 year. If the registration decision is withdrawn, the issuer shall, in accordance with Article 28 of the Measures, 6 months after the decision is made, the issuer may again apply for a public offering and listing.
The CSRC may also refer to the opinions of the exchange in the process of deciding whether to withdraw the registration. Article 26 of the “Measures” stipulates that after the CSRC makes a registration decision, if a major event occurs, the exchange shall deal with the aforesaid issues in a timely manner. If it discovers that the issuer has major issues affecting the issuance and listing conditions, it shall issue a clear opinion and Report to the Securities Regulatory Commission in a timely manner. In other words, after the occurrence of major events after the meeting, the Shanghai Stock Exchange can carefully identify the major issues of Ant Group, including further inquiries to the issuer, issue opinions and report to the CSRC as soon as possible, and the CSRC will decide whether to withdraw the registration.
The registration system is different from the approval system. The government does not make prior value judgments when issuing securities to issuers, but only conducts formal examination of application documents. The author believes that ensuring that the registration system is fair and just without legal flaws is a necessary guarantee for the implementation of the registration system. In this case, the securities regulatory authorities, exchanges, and issuers dared to pick the bones in the registration process, act in strict accordance with laws and regulations, and even take the initiative to make decisions that are conducive to the fair operation of the market. This is worthy of praise and reference in the future. However, there may still be some unclear links or procedures in the current registration system, which need to be corrected as soon as possible.