CSRC’s recentThree-year Action Plan for Improving the Quality of Listed Companies (2022-2025)(hereinafter referred to as theThree-year Action Plan) has made general, systematic and targeted arrangements for improving the quality of listed companies in the next three years. It is an important measure to further implement the overall plan of the CPC Central Committee and the State Council on improving the quality of listed companies, consolidate the achievements in improving the quality of listed companies, and urge listed companies to forge ahead with higher standard and quality development at a new starting point. SZSE has earnestly organized the study of theThree-year Action Planand firmly put it into place. In combination with the outline of building a “quality innovation capital center and world-class exchange” and SZSE’s strategic development plan for the 14th Five-year Plan period, we have formulated theWork Plan for Implementing the Three-year Action Plan for Improving the Quality of Listed Companies (2022-2025), laying down the schedule, roadmap and tasks for improving the quality of listed companies. In the next three years, SZSE will further strengthen the foundation for the high-quality development of SZSE-listed companies and form a fleet of highly innovative listed companies that proactively serve the needs of national strategies, with sound corporate governance and long term business prospects, that continuously enhance investor returns, and that actively fulfill social responsibilities.

Listed companies are a fundamental part of the real economy and are the backbone forces and important engines to implement the new development idea and foster a new development pattern. As always, it is on top of SZSE’s regulatory work to improve the quality of listed companies. We have deepened reforms, promoted development, prevented risks and optimized services to improve the quality of listed companies. The overall structure and general look of SZSE-listed companies have changed positively.

First, the innovation and growth characteristics have become more distinct and the direct financing capability has steadily improved.There are more than 2,700 companies listed on SZSE. Since the launch of the registration-based IPO system on the ChiNext Board more than two years ago, more than CNY 720 billion was raised through IPO and refinancing on the ChiNext Board. The scale of industries from key areas such as advanced manufacturing, digital economy and green and low-carbon development has grown substantially. The proportion of the market capitalization of the nine major industries including next-generation IT, new energy, new materials, biomedicine and high-end manufacturing has exceeded 70%. The ChiNext Board has become a hub of strategic emerging industries. In April 2021, the Main Board and the SME Board were successfully merged. After the merger, the new Main Board saw more than CNY 410 billion raised via IPO and refinancing and gathered over 130 large-scale industry leaders including nearly 50 leading tech firms, demonstrating an outstanding market-oriented blue chip feature.

Second, corporate governance has become more standard and the quality of information disclosure has improved.Good corporate governance and standard information disclosure are the two major drivers of quality improvement of listed companies. In terms of corporate governance, SZSE has worked with CSRC extensively in a corporate governance campaign to urge listed companies to conduct comprehensive checkups and make prompt remediation. The remediation completion rate is currently over 90%. In terms of information disclosure, SZSE has established a simple, friendly, precise and effective self-discipline regulation rules system and continuously intensified daily information disclosure review. The proportion of companies obtaining an A or a B in the information disclosure evaluation has increased year by year.

Third, prominent problems have been effectively solved and risk clearing has clearly accelerated.As at the end of November 2022, the number of SZSE-listed companies with a high pledge ratio decreased by two thirds from its peak value, indicating that the stock pledge risk of listed companies was effectively reduced. Over the past two years, SZSE has completed remediation cases of more than CNY 100 billion illegal fund occupation and guarantee, making positive progress in the battle of clearing arrears and releasing guarantee. Since the beginning of 2022, the number of listed companies and main responsible persons that SZSE has imposed disciplinary punishment on has nearly doubled year on year, showing clearly intensified efforts in cracking down on acts of violation. Over the past three years, 43 companies have been delisted, a centralized move to clear risky companies.

Improving the quality of listed companies is a “relay race”. It requires perseverance and long-time efforts. On the whole, with unremitting endeavor over the past few years, the foundation for the high-quality development of listed companies has been enhanced. Yet listed companies are still faced with some problems and there is still room for improvement in their quality. Based on the new situation and new problems as well as the characteristics and development law of SZSE-listed companies, SZSE adheres to serving the real economy, fully implements our responsibility as a regulator, gives full play to the advantages of SZSE, and upholds the principle of co-building, co-governance and sharing, and has formulated a new round of the implementation plan for improving the quality of listed companies.

First, SZSE will increase the supply of institutional arrangements aimed to facilitate high-quality development.Led by the registration-based IPO system reform across the whole market, we will optimize the issue and listing requirements on the Main Board, highlight the blue chip market characteristics of the Main Board, accelerate the improvement of the evaluation criteria of growth innovators and startups on the ChiNext Board, and improve its inclusiveness of tech innovators. We will increase the proportion of companies from strategic emerging industries and facilitate high-level circulation of technology, capital and the real economy. We will study and refine the policies and mechanisms on equity incentive, refinancing and M&A and reorganization, guide funds to invest in fields that meet the needs of national strategies and the orientation of industry policies, and support listed companies focusing on main business, growing bigger and stronger and achieving steady development. We will continuously refine the self-discipline regulation rules system to make the rules more scientific and effective. We will explore and establish layered and differentiated information disclosure arrangements, improve the adaptability of information disclosure policies under the new situation, and develop special information disclosure guidelines for key areas such as advanced manufacturing, digital economy and green and low-carbon development. We will take all factors into consideration when formulating the information disclosure requirements on the IPO and continuous listing stages of companies. Meanwhile, we will continue to increase the supply of innovative products, study and develop relevant themed fund products, and guide medium and long-term funds to invest in quality assets.

Second, SZSE will accelerate the efforts to improve the quality and efficiency of regulation that facilitates high-quality development.We will focus on regulation as our main responsibility and main business, deepen the regulatory transformation, adhere to classified regulation, scientific regulation, targeted regulation and technology-enabled regulation, and improve the systematicness and timeliness of regulation. We will, according to the principle of “focusing on the two ends and promoting the middle”, strengthen the regulation of head companies, focus on the regulation of risk companies, and build a comprehensive risk prevention and resolution system. We will help solve the prominent problems that a group of companies have in corporate governance such as abusing control and failing to fulfill commitments to improve the endogenous power of corporate governance. We will keep a close eye on the “critical minority”, strengthen intermediaries’ duty performance, intensify the punishment of “chief criminals”, and crack down on vicious violations of laws and regulations such as financial fraud and occupation of guarantee. We will improve diversified delisting channels, delist those that should be delisted and save those that can be saved as early as possible, and ensure effective and stable delisting. We will establish a “manual + technology + platform” deeply integrated regulatory system, continuously promote the building of the “corporate portrait” system, and push for the digital and intelligent transformation of the regulation of listed companies.

Third, SZSE will build a market ecosystem that facilitates high-quality development.With a focus on key areas such as advanced manufacturing, digital economy and green and low-carbon development, we will optimize the comprehensive service system and strengthen targeted market services. We willwork unswervingly both to consolidate and develop the public sector and to encourage, support and guide development of the non-public sector. We will support the deepening of the reform of state-owned assets and state-owned enterprises, help improve the competitiveness of state-holding companies, raise the governance level and risk resistance ability of private enterprises, and facilitate the development of the non-public sector. We will keep abreast of listed companies’ difficulties and demands, continuously refine regulatory services and measures, and provide services that have a human touch and can produce actual effect. We will strengthen cooperation with local governments to form the maximum synergy to improve the quality of listed companies. Also, we will leverage the platform functions of the exchange to hold sharing meetings, industry training and industry salons and so on regularly, to create a “friends circle” among industries and companies.

We will continue to implement the principle of “system building, no intervention, and zero tolerance” and the urges to revere the market, revere the rule of law, hold high professionalism, stay alert to risks, and obtain support from various parties. We will stick to the market-oriented, law-based and international direction, ensure the effective implementation of theThree-year Action Plan, and improve the functions and characteristics of the Main Board and the ChiNext Board. We will support enterprises in key areas such as advanced manufacturing, digital economy and green and low-carbon development becoming bigger and stronger, further promote the high-quality development of SZSE-listed companies with high-quality policies, high-quality regulation and high-quality services. We will strive to build a representative listing market of growth innovators, lay a solid foundation for the building of a standard, transparent, open, dynamic and resilient capital market, and inject new vitality to serve the creation of a new development pattern and realize high-quality economic development.