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cailianshe news, september 6 (reporter lin jian)after four months of soliciting opinions and making revisions, the "regulations on the supervision of the csrc system's resigned personnel's investing in companies to be listed (trial)" was officially released. on september 6, the csrc issued the "regulations on the supervision of the csrc system's resigned personnel's investing in companies to be listed (trial)", which put forward further regulatory requirements for the csrc system's resigned personnel's investing in companies to be listed. the new regulations will be officially implemented on october 8.

this is also the capital market's first most comprehensive and integrated regulatory provision on former employees of the securities regulatory system investing in companies seeking to go public. its core lies in reflecting the securities regulatory authorities' adherence to the principle of "turning the knife inward and targeted supervision" and the importance they attach to related issues.

the new regulations clearly state that, according to the verification of intermediary institutions, if there are improper shareholdings such as former employees buying shares during the prohibited period or using their original positions to obtain investment opportunities, the issuer must clean up the relevant shareholdings; if there are no improper shareholdings, the former employees must issue relevant commitments. after the sponsor and the issuer's lawyer fully verify and express their opinions on the relevant issues, they will issue and submit special explanations. on this basis, the stock exchanges will promote the initial public offering review of the relevant companies in a normal and orderly manner in accordance with the regulations. the csrc will verify the shareholding of former employees as needed, review the review and registration process, and transfer any clues of violations of laws and regulations to the relevant departments for handling.

stricter requirements for former employees to invest in companies planning to go public

the csrc already has regulations on former employees’ equity investment in companies to be listed, and this new regulation is an upgraded version. the “guidelines for the application of regulatory rules—issuance category no. 2” issued in may 2021 clearly requires intermediary institutions to conduct a thorough investigation of shareholders of former employees in the csrc system, and stipulates that improper equity investment must be strictly cleared if relevant circumstances exist. this new regulation has a total of 12 articles, with three main “upgrades”.

the first upgrade is in duration. the new regulations extend the ban period for resigned personnel to buy shares, especially highlighting the supervision requirements for resigned personnel who had served in issuance supervision positions or were related to the management of the accounting committee before leaving. the ban period for resigned personnel who had served in issuance supervision positions within 5 years before leaving, or were members of the accounting committee before leaving, will be extended to 10 years; for other resigned personnel at the department level and above, the ban period will be extended from 3 years to 5 years, and from 2 years to 4 years for those below the department level.

the second upgrade is reflected in the scope. the new regulations expand the scope of strict supervision of resigned personnel. the new regulations show thatexpand the scope of verification by intermediary agencies from the departing employee himself to his parents, spouse, children and their spouses.

the third upgrade is the intensity, granularity and degree. the new regulations put forward higher requirements for the verification of intermediary institutions. intermediary institutions shall verify the investment background, price fairness, source of funds, authenticity of exit, etc. of relevant personnel and express clear opinions. the csrc shall verify and review the relevant work.

the scope of strict investigation has been expanded to include their parents, spouses, children and their spouses.

it can be seen that the new regulations will be implemented in a month. how to promote implementation and how should relevant entities refer to and implement them? the new regulations are clear. in terms of intermediary agency verification, the new regulations put forward clearer regulatory requirements in terms of verification scope and content. if there are resigned personnel and their parents, spouses, children and their spouses holding shares, the intermediary agency shall verify the following contents in detail and express clear opinions:

first, the relevant investment background, the ways and methods of obtaining investment opportunities, and whether they are related to the impact of the original position;

second, the fairness of the price, whether there is a significant difference with the comparable price of the same period, whether the pricing basis is reasonable, and whether there is any situation of obvious unfairness or benefit transfer;

the third is the source of funds, whether it is self-owned funds, whether it matches personal income and family background, whether there is any proxy holding of shares, etc.;

fourth, the authenticity of the exit, such as whether the relevant shareholdings have been liquidated, the path and method of liquidating the shares, the source of funds of the transferee, the fairness of the price, the payment of consideration, etc.

if improper investment violates laws and disciplines, it will be transferred to the relevant departments for handling

the csrc has always been committed to maintaining the market's "three fairness" order, preventing illegal and irregular "wealth creation", and strictly supervising the construction of clean government. it has insisted on turning the knife inward and targeted supervision, and has implemented penetrating supervision on the shares of the companies to be listed by the resigned personnel of the csrc system. it can be seen that the focus is on reducing the position identity value formed by the resigned personnel of the csrc when they exercise public power in office, and cooling down the "residual heat" of the supervisory cadres after they leave. after several years of strict control, the shares of the companies to be listed by the resigned personnel have been effectively supervised.

from the data, the number of newly-listed companies that have resigned employees holding shares has dropped significantly; among the existing companies under review, the number and proportion of companies with such situations are very small. at present, the review cycle of companies involving resigned employees is generally longer than that of general companies. according to recent reports, resigned employees of the securities regulatory system will not only not receive "special care", but will be subject to stricter restrictions.

issuers, intermediaries and relevant former employees can all check whether there are any problems and correct them in a timely manner by comparing them with the rules. in the past few years, some companies that are planning to go public and in which former employees have invested have been listed one after another after being verified by intermediaries to be in compliance with the rules and after passing the review and registration.in general, the supervision system for shares held by former employees has fully played the role of strict supervision and strong constraints on the one hand, and on the other hand, it also supports the initial public offering of enterprises that meet the requirements of the rules.

strengthening self-construction is an important organizational guarantee for the csrc to fully perform its main responsibilities and promote high-quality development of the capital market. reporters noted that at the press conference on march 15 this year, li chao said that the csrc issued the document "opinions on implementing the standards of political strength, ability and work style to comprehensively strengthen the self-construction of the csrc system". this document emphasizes strictness, facing problems directly, and turning the knife inward, insisting on leading self-construction with self-revolution, and promoting the comprehensive and strict governance of the party, the building of a clean and honest party style, and the anti-corruption struggle in the csrc system to go deeper.

the promulgation and implementation of the "regulations on the supervision of resigned personnel" is an important measure for the csrc to strictly implement the "new nine articles" on "strictly and tightly improving the management of resigned personnel". it will be conducive to improving the credibility of supervision work, promoting the healthy development of the capital market, and maintaining the stable operation of financial markets and financial institutions.