The scope of application of the simplified review procedure includes two types of transactions: First, share swap and absorption mergers between listed companies. Second, high-quality listed companies issuing shares to purchase assets and not constituting major asset restructurings. High-quality listed companies refer to those with a total market value of over 10 billion yuan and whose information disclosure quality evaluation by the exchange in the past two years is A. For restructuring transactions that meet the conditions of the simplified review procedure, the Shanghai and Shenzhen exchanges will accept them within two working days based on the verification opinions of intermediary institutions and issue review opinions within five working days after acceptance.
On the evening of September 24, in order to implement the ‘Opinions of the China Securities Regulatory Commission on Deepening the Reform of the Listed Company Mergers and Acquisitions Market’ and further optimize the restructuring review procedure, improve restructuring review efficiency, and activate the mergers and acquisitions market, the Shanghai and Shenzhen exchanges plan to revise the relevant provisions of the review rules for major asset restructurings of listed companies (hereinafter referred to as the’restructuring review rules’).
For restructuring transactions meeting the conditions of the simplified review procedure, the Shanghai and Shenzhen Stock Exchanges accept them within 2 working days based on the verification opinions of intermediary institutions. They issue review opinions within 5 working days after acceptance. The restructuring review institutions of the exchanges do not conduct review inquiries and there is no need to submit the transaction to the merger and acquisition restructuring committee for review.
To strengthen the responsibilities of all parties in the simplified review procedure, the Shanghai and Shenzhen Stock Exchanges make it clear that listed companies and their related parties should make commitments that this transaction meets the requirements for applying the simplified review procedure. Tighten and compact the responsibilities of intermediary institutions in verification and inspection. Independent financial advisors should issue clear and affirmative verification opinions on whether this transaction meets the requirements for applying the simplified review procedure. At the same time, to avoid abuse of the simplified review procedure, the Shanghai and Shenzhen Stock Exchanges strengthen post-event supervision of relevant restructuring transactions. If violations of relevant provisions of the simplified review procedure are found, they will be dealt with severely in accordance with relevant regulations. The Shanghai Stock Exchange stated that it will, as always, adhere to market-oriented and legalized principles, support market-oriented transaction arrangements and scheme innovations set up in accordance with regulations, promote the landing of more demonstration cases, better play the main channel role of mergers and acquisitions in the capital market, promote the improvement of the quality of listed companies, and continuously consolidate the internal foundation for the healthy development of the market. Merger and acquisition restructuring is an important way to optimize resource allocation and stimulate market vitality. Since this year, the regulatory authorities have introduced a series of support policies to further optimize the restructuring policy environment, continuously promote market-oriented reforms, stimulate market vitality, and help listed companies improve quality and efficiency and become stronger and better. Under the warm policy breeze, mergers and acquisitions in the capital market have entered a new round of active period. According to data from the China Securities Regulatory Commission, since May this year, nearly 50 major restructuring cases disclosed in the entire market have received relatively positive market responses. With the joint efforts of all parties in the market, demonstration cases are also accelerating to land. On September 13, the restructuring application of 3Peak’s issuance of directional convertible bonds combined with cash acquisition of Chipways was registered and approved by the China Securities Regulatory Commission. The innovation in the scheme of this case has attracted market attention. For example, the transaction target Chipways is an unprofitable pre-IPO enterprise. It sets differentiated pricing to take into account the demands of all parties. The evaluation method and valuation fully respect market choices. In the view of industry insiders, the smooth landing of this case of 3Peak provides a useful reference for many enterprises planning to go public, including those IPO withdrawn enterprises without major compliance defects, to reasonably choose securitization methods and for venture capital institutions to reasonably choose exit channels. At the same time, the progress of regulatory review has also significantly accelerated. On September 2, information disclosed on the official websites of the Shanghai and Shenzhen Stock Exchanges shows that the registration applications of two companies, China Literature and Huaya Intelligent, for issuing shares to purchase assets have been registered by the China Securities Regulatory Commission.It is reported that Huaya Intelligent’s reorganization project is the third reorganization project to be approved by the Shenzhen Stock Exchange since June this year.
The transaction plan of Puyuan Jingdian, a company on the STAR Market, took only 45 days from declaration to registration with the China Securities Regulatory Commission. This is also the first share issuance transaction registered after the release of the ‘Eight Rules for the STAR Market’, fully reflecting the valuation tolerance of merger and acquisition and reorganization policies for such enterprises.