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Shanghai Stock Exchange, Shanghai Financial Court Hold Symposium On Implementing Opinions On Judicial Guarantee For Launching The SSE Star Market And Piloting The Registration-Based IPO System

Date 18/07/2019

On July 10, Shanghai Stock Exchange (SSE) and the Shanghai Financial Court (SFC) jointly held a symposium on implementing the opinions on the judicial guarantees for launching the SSE Star market and piloting the registration-based IPO system. Attending the meeting were the relevant officials of the Shanghai High People's Court (SHPC), the SFC and the SSE, and also present at the symposium were representatives of market participants such as issuers on the SSE Star Market, securities companies, law firms and accounting firms.

The "Several Opinions of the Supreme People's Court on Providing Judicial Guarantee for Launching the SSE Star Market and Piloting the Registration-based IPO System Reform" and the "Several Opinions of the Shanghai High People's Court on Serving and Guaranteeing the Launch of the SSE Star Market and the Pilot Program of the Registration-based IPO System” are comprehensive and all-round judicial guarantee documents introduced by the Supreme People's Court (SPC) and SHPC specially for launching the SSE Star Market and piloting the registration-based IPO system. At the symposium, relevant judges of the SHPC interpreted the judicial guarantee documents. The representatives present at the symposium conducted in-depth discussions on how to deeply understand and implement the above-mentioned opinions on judicial guarantees.

Improving the judicial guarantee mechanism is an important part of the reform in launching the SSE Star Market and piloting the registration-based IPO system. Adhering to the rule of law and respecting the law of the market, the opinions on judicial guarantee introduced by the SPC and SHPC provide effective guidance for further defining the rights and obligations of all market participants and facilitating the formation of the market environment where market participants can perform their duties in accordance with the law and safeguard their legitimate rights and interests. The opinions are also of great significance for ensuring the smooth implementation of the major reform of launching the SSE Star Market and piloting the registration-based IPO system.

Representatives of market participants agreed that the two documents of opinions on judicial guarantee provide a number of specific and pragmatic rules for judicial adjudication and judicial measures. On the one hand, the opinions provide strong guidance, chart a clear “responsibility map” on the issuers’ responsibility for integrity, the intermediaries’ responsibility for checks and the investors’ responsibility as buyers, and are conducive to the correct understanding and implementation for market participants in information disclosure and business operation. On the other hand, the opinions are also highly relevant, and they provide effective responses for the demands of the sci-tech innovative companies in intellectual property protection, special corporate governance structure and other aspects, and reflect the characteristics of “sci-tech innovation”. In addition, designating the SFC to exercise the centralized jurisdiction will ensure the unification of the standards for case trials and help to maintain the confidence of the market participants.

An official of the SHPC pointed out that the cases involving the SSE Star Market are subject to the centralized jurisdiction of the SFC, which provides opportunities as well as challenges for the SFC and the SHPC. The court system in Shanghai will perform its trial duties in accordance with the law, continue to accumulate trial experience, and create a favorable judicial environment for the reform of the SSE Star Market and the pilot registration-based IPO system. It is also hoped that the all participants in the market can abide by the market rules, perform their own duties and avoid breaching the law.

An SFC official said that the relevant opinions on judicial guarantee make higher requirements for the court to explore and improve the securities-related litigation legal system that is compatible with the registration-based IPO system, and provide important guidance for carrying out trials related to the SSE Star Market. As the court for piloting the centralized jurisdiction, the SFC will vigorously implement the requirements of the two documents of opinions on judicial guarantee, and formulate supporting opinions on implementation as soon as possible on the basis of in-depth research.

An SSE official said that the relevant opinions on judicial guarantee provide strong support and guarantee for the SSE to carry out the review for stock issuance and listing and the self-regulation on the SSE Star Market. The SSE will implement the requirements of the opinions on judicial guarantee, prudently carry out the issuance and listing review for the stocks on the SSE Star Market, and pay full attention to the quality of the issuers’ information disclosure and the quality of the intermediaries’ practice, while strengthening the self-regulation in all processes such as issuance, underwriting, listing and trading, so as to maintain the market order of openness, fairness and justice and protect legitimate rights and interests of investors.