On the morning of September 24th, at a press conference held by the State Council Information Office, Wu Qing, Chairman of the China Securities Regulatory Commission (CSRC), introduced the situation related to financial support for high-quality economic development and mentioned subsequent reform measures for the capital market.

He emphasized the need to highlight the enhancement of the capital market's inherent stability, the service to the recovery and improvement of the real economy and high-quality economic development, the protection of the legitimate rights and interests of small and medium investors, and the continuous improvement of the capital market ecosystem.

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In the evening of the same day, the official website of the CSRC released the "Opinions on Deepening the Reform of the Mergers and Acquisitions (M&A) and Restructuring Market of Listed Companies" and the "Supervision Guidelines for Listed Companies No.

10 - Market Value Management (Draft for Comments)", and openly sought opinions.

Deepening the reform of the M&A and restructuring market of listed companies guides more resource elements to gather towards new quality productive forces.

The CSRC pointed out that M&A and restructuring are important market tools for supporting economic transformation and upgrading and achieving high-quality development.

The new "Nine National Articles" make important deployments for the active M&A and restructuring market.

To further stimulate the vitality of the M&A and restructuring market, the CSRC, based on extensive research, has formulated the "Opinions on Deepening the Reform of the M&A and Restructuring Market of Listed Companies" (hereinafter referred to as the "Opinions"), adhering to the market-oriented direction and better playing the main channel role of the capital market in corporate M&A and restructuring.

The main content of the "Opinions" is as follows: 1.

Support listed companies to transform and upgrade towards the direction of new quality productive forces.

The CSRC will actively support listed companies to carry out M&A and restructuring around strategic emerging industries, future industries, etc., including cross-industry M&A based on transformation and upgrading goals, acquisition of unprofitable assets that help to complement and strengthen the chain and improve key technical levels, and support companies in the "two innovations" plate to merge upstream and downstream assets in the industry chain, guiding more resource elements to gather towards the direction of new quality productive forces.

2.

Encourage listed companies to strengthen industrial integration.

While the capital market supports the development of emerging industries, it will continue to help traditional industries to reasonably improve industrial concentration and resource allocation efficiency through restructuring.

For the integration needs between listed companies, support will be provided by improving the lock-up period regulations and greatly simplifying the review procedures.

At the same time, arrangements such as the "reverse linkage" of the lock-up period are made to encourage private equity funds to actively participate in M&A and restructuring.

3.

Further improve regulatory tolerance.

The CSRC will respect the rules while respecting market laws, economic laws, and innovation laws, and further improve tolerance for matters such as restructuring valuation, performance commitments, same-industry competition, and related-party transactions, better playing the role of the market in optimizing resource allocation.

4.

Improve the transaction efficiency of the restructuring market.

The CSRC will support listed companies to issue shares and convertible bonds and other payment tools, pay transaction consideration in installments, and support financing in installments according to the transaction arrangements, to improve transaction flexibility and capital use efficiency.

At the same time, a simplified review procedure for restructuring is established, and the review process is greatly simplified, the review time limit is shortened, and the efficiency of restructuring is improved for listed companies that meet the conditions.

5.

Improve the service level of intermediary institutions.

The active M&A and restructuring market is inseparable from the function of intermediary institutions.

The CSRC will guide securities companies and other institutions to improve their service capabilities, give full play to the role of transaction matching and professional services, and help listed companies to implement high-quality M&A and restructuring.

6.

Strengthen supervision according to the law.

The CSRC will guide all parties to the transaction to carry out M&A and restructuring activities in a standardized manner, strictly fulfill various legal obligations such as information disclosure, crack down on various illegal and irregular behaviors, and effectively maintain the order of the restructuring market, and effectively protect the legitimate rights and interests of small and medium investors.

In addition, to implement the "Opinions on Deepening the Reform of the M&A and Restructuring Market of Listed Companies", the CSRC and the stock exchanges have revised rules such as the "Administrative Measures for Major Asset Restructuring of Listed Companies", and are soliciting opinions at the same time.

Further guide listed companies to pay attention to their own investment value.

On September 24th, in order to implement the "Several Opinions on Strengthening Supervision, Guarding Against Risks, and Promoting High-Quality Development of the Capital Market" (Guofa [2024] No.

10), further guide listed companies to pay attention to their own investment value, and effectively improve investor returns, the CSRC has studied and drafted the "Supervision Guidelines for Listed Companies No.

10 - Market Value Management (Draft for Comments)" (hereinafter referred to as the "Guidelines"), and is soliciting opinions from the public.

The CSRC pointed out that since this year, more than 95% of listed companies have held performance explanation meetings, the number and amount of share buybacks, as well as the amount of cash dividends, have reached historical highs, and the number of mid-term dividends has increased nearly three times.

Overall, the market atmosphere of listed companies actively communicating with investors and taking multiple measures to improve the investment value of listed companies is taking shape, but there are still some problems in practice where the investment value of some listed companies is not reasonably reflected, which has affected investor confidence and the stability of the capital market to a certain extent.

In April this year, the "Several Opinions on Strengthening Supervision, Guarding Against Risks, and Promoting High-Quality Development of the Capital Market" (Guofa [2024] No.

10) clearly proposed to promote listed companies to improve investment value and formulate guidelines for market value management of listed companies.

In order to implement this, and to effectively improve investor returns, the CSRC, together with relevant ministries and commissions, has studied and drafted the "Guidelines", requiring listed companies to firmly establish the concept of investor-oriented, and promote the full reflection of the investment value of listed companies.

Specifically, the "Guidelines" consist of 14 articles, mainly including the following four aspects: 1.

Define the definition of market value management.

Articles 1 to 3 of the "Guidelines" clarify the goals, definition, and specific methods of market value management.

Listed companies should carry out market value management based on improving the quality of listed companies, and legally and compliantly use M&A and restructuring, equity incentives, employee stock ownership plans, cash dividends, investor relations management, information disclosure, shareholding increase and buyback, and other methods to enhance the investment value of listed companies.

2.

Clarify the responsibilities and obligations of relevant entities.

Articles 4 to 7 of the "Guidelines" clarify the responsibilities and obligations of the board of directors, directors and senior management personnel, controlling shareholders, and other relevant entities.

First, the board of directors should pay attention to the improvement of the quality of listed companies and fully consider the interests and returns of investors in major decisions and specific work.

Second, the chairman should supervise, promote, and coordinate related work, directors and senior management personnel should actively participate in various work to improve the investment value of listed companies.

Third, the secretary of the board should do a good job in investor relations management and information disclosure and other related work.

Fourth, controlling shareholders can boost market confidence through shareholding increase and other methods under certain conditions.

3.

Clarify the special requirements for two types of companies.

Articles 8 and 9 of the "Guidelines" make special requirements for companies included in the main index and companies that have been undervalued for a long time.

First, companies included in the main index should formulate and publicly disclose market value management systems, clarify specific responsibilities, internal assessment and evaluation, etc., and make special explanations on the implementation of the system at the annual performance explanation meeting.

Other listed companies can refer to the implementation.

Second, companies that have been undervalued for a long time should disclose valuation enhancement plans, including goals, deadlines, and specific measures, and make special explanations on the implementation of the valuation enhancement plan at the annual performance explanation meeting.

4.

Clarify the prohibited matters.

Article 10 of the "Guidelines" clearly requires listed companies and their controlling shareholders, actual controllers, directors, senior management personnel, etc., to improve compliance awareness and not to engage in market manipulation, insider trading, illegal information disclosure, and other illegal and irregular behaviors that damage the legitimate rights and interests of small and medium investors in market value management.

On the evening of September 24th, the Shanghai Stock Exchange and Shenzhen Stock Exchange issued announcements at the same time!

Shanghai Stock Exchange announced the Shanghai Stock Exchange issued a notice on soliciting opinions on the "Shanghai Stock Exchange Listed Company Major Asset Restructuring Review Rules (Draft for Comments)".

In order to implement the "Opinions on Deepening the Reform of the M&A and Restructuring Market of Listed Companies" (hereinafter referred to as the "M&A Reform Opinions"), further optimize the restructuring review process, improve the efficiency of restructuring review, and activate the M&A and restructuring market, the Shanghai Stock Exchange (hereinafter referred to as the SSE) plans to revise the "Shanghai Stock Exchange Listed Company Major Asset Restructuring Review Rules" (hereinafter referred to as the "Restructuring Review Rules").

The relevant situation is explained as follows: 1.

Revision background.

The "M&A Reform Opinions" proposed: "Establish a simplified review procedure for restructuring, for the absorption and merger between listed companies, and for high-quality companies with a market value of more than 10 billion yuan and a continuous two-year A-level information disclosure quality evaluation by the SSE to issue shares to purchase assets (not constituting a major asset restructuring), streamline the review process, and shorten the review registration time."

To implement the above requirements, the SSE plans to adjust the relevant provisions of the "Restructuring Review Rules" accordingly.

2.

Main revision content.

The "Restructuring Review Rules" consists of nine chapters and eighty-eight articles.

A special section is added in Chapter Five to make special provisions for the simplified review procedure, and other individual clauses are adjusted adaptively.

The specific content is as follows: (1) Clarify the applicable situations of the simplified review procedure.

The scope of application includes two types of transactions, one is the share-for-share absorption and merger between listed companies, and the other is high-quality listed companies issuing shares to purchase assets and not constituting a major asset restructuring.

High-quality listed companies refer to those with a total market value of more than 10 billion yuan and an SSE evaluation of A-level for the information disclosure quality of listed companies in the past two years.

(2) Set a negative list for the simplified review procedure.

First, the listed company or its controlling shareholder, actual controller, intermediary institution, or its related personnel have been subject to administrative penalties or disciplinary sanctions by the CSRC or trading venue within a certain period, or there are other major breaches of trust; second, the transaction plan has major unprecedented, major public opinion, and other major complex situations.

(3) Regulate the relevant mechanisms of the simplified review procedure.

For restructuring transactions that meet the conditions of the simplified review procedure, the exchange accepts them based on the verification opinions of intermediary institutions within 2 working days, and issues review opinions within 5 working days after acceptance.

The exchange's restructuring review institution does not conduct review inquiries, and there is no need to submit the transaction to the M&A and Restructuring Committee for deliberation.

(IV) Strengthen the responsibilities of all parties in the simplified review process.

Listed companies and their related parties should commit to the transaction meeting the requirements of the applicable simplified review process.

The responsibilities of intermediaries for verification and control should be tightened and solidified, and independent financial advisors should issue a clear and affirmative verification opinion on whether the transaction meets the requirements of the applicable simplified review process.

At the same time, to prevent the misuse of the simplified review process, the exchange strengthens post-event supervision of relevant reorganization transactions, and if any violations of the regulations of the simplified review process are found, they will be dealt with severely in accordance with relevant regulations.

Suggestions or opinions on the Shanghai Stock Exchange Announcement [2024] No.

29 can be submitted in two ways: first, by logging onto the official website of this exchange (hereby notified.

On September 24, the Shenzhen Stock Exchange (hereinafter referred to as "SZSE") issued a notice on soliciting public opinions on the revision of the "Shenzhen Stock Exchange Listed Company Major Asset Reorganization Review Rules" (hereinafter referred to as the "Reorganization Review Rules").

In order to implement the "Opinions of the China Securities Regulatory Commission on Deepening the Reform of the Market for Mergers and Acquisitions and Reorganizations of Listed Companies" (hereinafter referred to as the "M&A Reform Opinions"), further optimize the reorganization review process, improve the efficiency of reorganization reviews, and invigorate the M&A and reorganization market, SZSE intends to revise the "Reorganization Review Rules".

The relevant situation is explained as follows: 1.

Background of the revision: The "M&A Reform Opinions" propose: "Establish a simplified review process for the absorption and merger between listed companies, and for high-quality companies with a market value of more than 10 billion yuan and a continuous A-level evaluation of information disclosure quality for two years, issuing shares to purchase assets (not constituting a major asset reorganization), to streamline the review process and shorten the review registration time."

To implement the above requirements, SZSE plans to make corresponding adjustments to the relevant provisions of the "Reorganization Review Rules".

2.

Main content of the revision: The "Reorganization Review Rules" consist of nine chapters and eighty-eight articles.

A special section has been added in Chapter Five to make special provisions for the simplified review process, and other individual provisions have been adjusted to adapt.

The specific content is as follows: (i) Clarify the applicable situations of the simplified review process.

The applicable scope includes two types of transactions: one is the stock-for-stock absorption and merger between listed companies, and the other is the issuance of shares by high-quality listed companies to purchase assets without constituting a major asset reorganization.

High-quality listed companies refer to those with a total market value of more than 10 billion yuan and a continuous A-level evaluation of information disclosure quality by SZSE for the last two years.

(iii) Stipulate the relevant mechanisms of the simplified review process.

For reorganization transactions that meet the conditions of the simplified review process, the exchange accepts them based on the verification opinions of intermediaries within 2 working days, and issues a review opinion within 5 working days after acceptance.

The exchange's reorganization review institution does not conduct review inquiries, and there is no need to submit the transaction for consideration by the reorganization committee.