The Shanghai and Shenzhen stock exchanges issued new rules on the bankruptcy reorganization of listed companies

2022-09-12 0 By

On the evening of March 31, the Shanghai and Shenzhen stock exchanges issued guidelines on listed companies’ bankruptcy reorganization and implemented them from the date of release.The guidelines regulate the introduction of restructured investors, specify the principle requirements for the price of shares acquired by restructured investors and share lock-in arrangements, and provide for the ex-option (interest) arrangement of the equity adjustment scheme.In recent years, bankruptcy and reorganization of listed companies have increased, and some cases have been widely concerned by the market.In practice, bankruptcy matters involve a number of specific links and a number of specific matters, a long chain of procedures, a long time span, the company’s main business, assets and liabilities structure, the ability to continue operating has a significant impact.The guidelines combine market demand and regulatory practice to make all-round and multidimensional institutional arrangements for standardizing and promoting bankruptcy reorganization.The first is to improve the system supply, comprehensive coverage of listed companies and related parties bankruptcy matters.The guidelines fully cover bankruptcy reorganization, settlement and liquidation, and proactively incorporate pre-reorganization into the norm.At the same time, considering the impact of relevant matters, the guidelines stipulate that if the listed company and its controlling shareholder or the largest shareholder, important subsidiaries and participating companies go bankrupt and may have a great impact on the trading price of the company’s stocks and derivatives, they shall fulfill the information disclosure obligation as required.Secondly, strengthen information disclosure to fully protect investors’ right to know.The guidelines, on the one hand, put forward information disclosure requirements based on the whole chain of bankruptcy matters, diverting process and stages. On the other hand, specific disclosure requirements are made for the major and unique issues involved in bankruptcy matters, such as the property change plan, business plan and the introduction of restructuring investors.At the same time, the guidelines clearly require listed companies and relevant parties to effectively prevent and control insider trading, and submit insider information files at relevant nodes.The guidelines also detailed the suspension and resumption of trading, requiring that during the suspension period, listed companies should fully disclose the major work involved in the relevant matters, the progress of the matters, the impact on the company and the follow-up arrangements.Finally, we will urge them to return to their rightful place and protect the legitimate rights and interests of market subjects.The guidelines make arrangements for the protection of investors’ rights and interests in accordance with the requirements of upper regulations.Among them, the introduction of restructuring of investors to standardize the issues, clear restructuring of investors to the stock price of the principle requirements and share locking arrangements, at the same time the equity adjustment plan excluding rights (interest) arrangements made provisions.In addition, the intermediary agencies are required to check key issues such as the calculation formula of reference price for adjustment and division of rights (interest), and tighten the responsibility of intermediary agencies as gatekeepers.The Shanghai and Shenzhen stock exchanges said they would strictly implement the guidelines, continue to track and evaluate the effect of the implementation of the guidelines, effectively regulate bankruptcy restructuring and other matters, smooth diversified exit channels, form a healthy market ecology, and create a group of listed companies that reflect the requirements of high-quality development.