38 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 JUNE 2024 In the first four months of 2024, 35 companies successfully went public on the A-share market, a year-on-year drop of over 50 percent both for the number of companies and the amount of funds raised. At the same time, after the Lunar New Year, A-share IPOs experienced a three-month period when zero applications were reviewed. It was not until May 16 that review of companies’ listing and refinancing applications was reactivated. In terms of regulation, the first half of the year continues to see the A-share market prioritize “stability and tight regulation.” During the annual Two Sessions, Wu Qing, chairman of the China Securities Regulatory Commission, stated that regulation should focus on strengthening fundamentals and tightening both supervision and administration. Shortly thereafter on Mar. 15, the revised Provisions on On-site Inspection of Enterprises Applying for Initial Public Offering were promulgated for implementation, emphasizing that “making an IPO application means shouldering responsibilities” and significantly increasing the percentage of onsite inspection. On Apr. 12, the Several Opinions of the State Council on Strengthening Regulation, Guarding against Risks and Promoting High-quality Development of the Capital Market, colloquially known as the new Nine Articles, were released, focusing on regulation over all aspects of a listed company. This is the first time in ten years that the State Council has again opted to guide the development of the capital market by issuing Nine Articles. The new Nine Articles have also introduced the “1+N” regulatory framework under which the CSRC will issue a slew of supporting rules and regulations. Subsequently, the CSRC promulgated the Opinions on Strictly Enforcing the Delisting System and the Sixteen Measures for the Capital Market to Serve the High-quality Development of Science and Technology Enterprises, also known as the Sixteen Measures. To Qi Menglin, executive partner of China Commercial Law Firm, “the current policy adjustment period can be seen as a phase of self-repair of the capital market where tight regulation is employed to achieve higher-quality development of the capital market.” However, he also concedes that “with tightening regulation, companies have become more cautious and less interested in applying for A-share IPOs, although they are still closely watching the space.” Tan Qing, partner of Tian Yuan Law Firm, however, sees bright spots in the new regulations. “The Nine Articles emphasize the need to ‘increase tolerance of new industries, new business models and new technologies, better serve the implementation of national strategies such as science and technology innovation, green development and Stateowned assets and State-owned enterprises reform, as well as the development and growth of small and medium-sized enterprises and private businesses, and promote the development of new productive forces’. Further, the Sixteen Measures highlight the importance of ‘accurately identifying technology-oriented companies and prioritizing support to technology-oriented companies that have achieved breakthroughs in key and core technologies to go public to raise funds.’” “These documents clearly demonstrate that the A-share market should focus on serving technology innovation enterprises that fit the development direction of new productive forces and master key and core technologies. Under the current regulatory stance, tech companies in industries such as new energy, new materials, advanced manufacturing and electronic information are prioritized for encouragement and have shown great interest in and expectations for A-share IPOs,” says Tan. In the face of changes in the capital market in the first half of 2024, Tan says that “the Tian Yuan team is also serving clients based on their actual needs. First, as regards listing projects of technology innovation enterprises that are in line with regulatory directions, our team has been CAPITAL MARKETS In the first half of 2024, China’s domestic regulatory policies continued to weigh on local companies eager to secure funding from both domestic and international capital markets. The concepts of “stability” and “tightness” are still predominant in the A-share market, which has indirectly led to a renewed interest in overseas listings. 2024年上半年，中国境内监管态势继续决定了国内企业在境内外资本市场寻求融资的热情。“稳”和“严”依旧是A 股市场的关键词，而这间接引发了境外上市的热度反弹。 BY HU YANGXIAOXIAO 作者：胡阳潇潇 CHINA CAPITAL MARKETS: A MID-YEAR REVIEW 资本市场半年观：A股、港股、美股
RkJQdWJsaXNoZXIy MjA0NzE4Mw==