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Cailianshe News, August 16 (Reporter Gao Yanyun)Science and Technology Innovation BoardNew rules for offline issuance of new shares have been issued. On August 16, the Shanghai Stock Exchange issued the "Implementation Rules for the Offline Issuance of Initial Public Offerings in the Shanghai Market (Revised in 2024)".

This revision mainly adds requirements for investors participating in the offline issuance of new shares on the Science and Technology Innovation Board, and adds requirements for holding the market value of the Science and Technology Innovation Board. From October 1, offline investors and the allotment objects they manage participating in the offline issuance of new shares on the Science and Technology Innovation Board, in addition to meeting the current market value threshold requirements, the lead underwriter should also require that the average daily market value of the total market value of the non-restricted A shares and non-restricted depositary receipts held on the Science and Technology Innovation Board in the 20 trading days before the base date (two trading days before the start of the preliminary inquiry) (including the base date) be RMB 6 million or more.

The new regulations are beneficial to the Science and Technology Innovation Board. The new regulations will bring certain benefits to the existing Science and Technology Innovation Board market. Previously, investors who subscribed to new stocks on the Science and Technology Innovation Board through the offline channel may not have held Science and Technology Innovation Board stocks. After the new regulations, offline investors need to buy and hold Science and Technology Innovation Board stocks before subscribing to new stocks, thereby indirectly forming a "market support" effect, which will help increase the market liquidity of the Science and Technology Innovation Board, stabilize market prices, and boost market confidence.

To purchase new shares on the Science and Technology Innovation Board, you must hold 6 million yuan of Science and Technology Innovation Board tradable shares

It is worth noting that this revision is to improve the market value allocation arrangements for new shares on the Science and Technology Innovation Board.

Shanghai Stock ExchangeIPOArticle 8 of the Implementation Rules for Offline Issuance only stipulates that the lead underwriter shall, in accordance with the provisions of the China Securities Association, require the off-line investors participating in the off-line issuance business and the placement objects managed by them to take the two trading days before the start of the preliminary inquiry as the base date, and the daily average market value of the total market value of non-restricted A-shares and non-restricted depositary receipts held in the Shanghai market in the 20 trading days (including the base date) before the base date to be RMB 60 million (inclusive) or more. For closed-end funds with themes such as science and technology innovation and entrepreneurship and closed-end strategic placement funds, the daily average market value of the total market value of non-restricted A-shares and non-restricted depositary receipts held in the Shanghai market in the 20 trading days (including the base date) before the base date shall be RMB 10 million (inclusive) or more.

The above original regulations did not mention the requirement of holding tradable shares of the Science and Technology Innovation Board in order to participate in the new listing of the Science and Technology Innovation Board.

Wang Jiyue, a senior investment banker, told reporters that the new regulations require that investors who subscribe to new STAR Market stocks must meet two conditions. They must hold more than 60 million yuan or more than 10 million yuan of Shanghai Stock Exchange circulating shares, and they must hold more than 6 million yuan in market value of STAR Market circulating shares. The latter can be either within the former (more than 60 million yuan or 10 million yuan) or outside of it.

"Before, you didn't need to have a bottom position in the Science and Technology Innovation Board to invest in it, but now it is required. The new regulations are more reasonable. Off-market investors can only buy new stocks on the Science and Technology Innovation Board if they hold positions in Science and Technology Innovation Board stocks. At the beginning, there were few Science and Technology Innovation Board stocks and the conditions were insufficient. Now that the Science and Technology Innovation Board has been open for 5 years, it fully meets the conditions for holding positions in offline new investments." said Wang Jiyue.

Implementing the “Eight Measures for the Science and Technology Innovation Board”

It is worth noting that the revision of the Science and Technology Innovation Board's offline issuance rules is to implement the relevant opinions of the China Securities Regulatory Commission's "Eight Measures on Deepening the Reform of the Science and Technology Innovation Board to Serve Technological Innovation and the Development of New Productivity" ("Science and Technology Innovation Board Eight Measures").

On June 19, the China Securities Regulatory Commission issued the "Eight Articles on the Science and Technology Innovation Board" to further deepen reforms, enhance inclusiveness of new industries, new business models and new technologies, give full play to the functions of the capital market, and better serve the overall situation of China's modernization.

First, strengthen the "hard technology" positioning of the Science and Technology Innovation Board. Strictly control the entry, resolutely implement the evaluation standards for science and technology innovation attributes, and give priority to supporting "hard technology" companies that have made breakthroughs in key core technologies in new industries, new formats, and new technologies to be listed on the Science and Technology Innovation Board. Further improve the precise identification mechanism for technology-based enterprises and give full play to the role of market mechanisms.

Second, carry out pilot projects to deepen the issuance and underwriting system. Optimize the pricing mechanism for new stock issuance, and adjust the high-price exclusion ratio for new stock pricing in the Sci-Tech Innovation Board pilot. Improve the market value allocation arrangement for new stocks on the Sci-Tech Innovation Board, and increase the market value requirements for off-line investors holding Sci-Tech Innovation Board stocks. In the Sci-Tech Innovation Board pilot, increase the allocation ratio of off-line investment institutions with a higher lock-up ratio and longer lock-up period for the public issuance of stocks by unprofitable enterprises.

Third, optimize the equity and debt financing system for Sci-Tech Innovation Board listed companies. Establish and improve a "green channel" for equity and debt financing, mergers and acquisitions, and restructuring of "hard technology" companies that are engaged in key core technology research. Strictly review and control refinancing to improve the efficiency of refinancing review for Sci-Tech Innovation Board companies.

Fourth, support mergers and acquisitions with greater strength. Support Sci-Tech Innovation Board listed companies to carry out mergers and acquisitions of upstream and downstream of the industrial chain to enhance industrial synergy. Appropriately increase the valuation inclusiveness of mergers and acquisitions of Sci-Tech Innovation Board listed companies, support Sci-Tech Innovation Board listed companies to focus on enhancing sustainable operating capabilities and acquire high-quality unprofitable "hard technology" companies. Enrich payment tools, encourage the comprehensive use of shares, cash, directional convertible bonds and other methods to implement mergers and acquisitions, and conduct research on installment payment of share consideration.

Fifth, improve the equity incentive system. Improve the incentive and constraint mechanism, encourage Sci-Tech Innovation Board listed companies to actively use equity incentives, and better bind interests with investors. Strengthen the constraints on equity incentive pricing, assessment conditions and targets, and improve the accuracy of incentives for core teams and business backbones.

Sixth, improve the trading mechanism and prevent market risks. Strengthen trading supervision and promote the smooth operation of the Science and Technology Innovation Board. Study and optimize the market maker mechanism and after-hours trading mechanism.ETFInclude transfers on the Fund Connect platform. Improve designated trading mechanisms to increase trading convenience. Continue to enrich the types of Sci-Tech Innovation Board indices, improve index compilation methods, and improve the "Shanghai Index" system.

Seventh, strengthen the supervision of the entire chain of companies listed on the Science and Technology Innovation Board. The implementation of supervision must be "thorny and sharp", and strictly crack down on fraudulent issuance, financial fraud and other market chaos on the Science and Technology Innovation Board, further consolidate the responsibilities of issuers and intermediary institutions, and more effectively protect the legitimate rights and interests of small and medium-sized investors. Improve the information disclosure exemption system, support Science and Technology Innovation Board listed companies to exempt from disclosing sensitive information such as commercial secrets in accordance with laws and regulations. Strengthen the positive incentives of regulatory policies, and guide the founding team, core technical backbones, etc. to voluntarily extend the share lock-up period.

Eighth, actively create a good market ecology. Promote the optimization of the judicial guarantee system mechanism of the Science and Technology Innovation Board, support the Shanghai Financial Court to innovate the financial trial system mechanism in financial cases related to the Science and Technology Innovation Board, and support the Shanghai Financial Arbitration Court to carry out arbitration pilot projects on the Science and Technology Innovation Board. Strengthen cooperation with local governments and relevant ministries and commissions, conduct regular visits to Science and Technology Innovation Board listed companies, help science and technology innovation enterprises solve practical difficulties, and jointly promote the improvement of the quality of Science and Technology Innovation Board listed companies.