LOCATION: SZSE English/RULES/SZSE Rules

Special Regulations on Suspending and Terminating the Listing of Stocks on SME Board

Date: 2007-01-08

Chapter I  General Provisions

 

Article 1 These Special Regulations are formulated in accordance with the Company Law, the Securities Law, administrative regulations, rules of competent authorities, and the Rules Governing the Listing of Stocks on Shenzhen Stock Exchange (hereinafter, Listing Rules) for the purpose of promoting the development of the companies listed on the SME Board (hereinafter, company) and protecting the legitimate rights and interests of investors. 

 

Article 2 These Special Regulations apply to delisting risk warning, listing suspension, listing resumption and listing termination as well as relevant corporate disclosure and trade suspension and resumption in respect of SME Board listed stocks. In the absence of any provision in these Special Regulations, the Listing Rules shall apply.

Chapter II  Delisting Risk Warning

 

Article 3 The Exchange will issue a delisting risk warning to a company if any of the following applies:

(1)     the company’s shareholders’ equity in the last fiscal year is shown as negative in the auditor’s report;

(2)     the company’s annual report of the last fiscal year is issued an adverse opinion or a disclaimer of opinion by the certified public accountant and the circumstance is deemed serious by the Exchange;

(3)     the company’s outstanding external guarantee (excluding those included in the consolidated financial statements) in the last fiscal year exceeds RMB 100 million and 100 percent of its net asset value (except for companies whose principal business is provision of guarantee), as shown in the auditor’s report;

(4)     capital misallocated by the company to its controlling shareholder and other related parties in the last fiscal year exceeds RMB 20 million or 50 percent of its net asset value;

(5)     the company is publicly censured by the Exchange more than once within 24 months;

(6)     for 20 consecutive trading days, the company’s shares close below its par value; or

(7)     the cumulative trade volume of the company’s shares through the Exchange’s trading system within a period of 120 consecutive trading days falls below 3 million shares.   

 

Article 4 Upon occurrence of any of the circumstances set out in (1), (2), (3) and (4) of Article 3, the company shall, after its board of directors has deliberated its annual report, submit a report in writing to the Exchange in a timely manner with the opinion of its board of directors included. The company’s shares and derivatives are suspended from trading on the day its annual report is disclosed. In case the disclosure is made on a non-trading day, trading is suspended on the following trading day. Upon trade resumption, a delisting risk warning on the company’s shares will be issued by the Exchange.

 

Article 5 Upon occurrence of any of the circumstances set out in (5), (6) and (7) of Article 3, the company shall submit the opinion of its board of directors in writing to the Exchange and, within two trading days, release a public cautionary announcement that its shares are likely to be imposed a delisting risk warning. The company’s shares and derivatives are suspended from trading on the day of the announcement and a delisting risk warning on the company’s shares will be issued by the Exchange upon its trade resumption. 

 

Article 6 Since the delisting risk warning is imposed, the company shall, at least within the first five trading days of each month, disclose the measures taken for lifting the delisting risk warning and the progress of relevant work.

 

Article 7 The company may file an application with the Exchange for lifting the delisting risk warning if it meets any of the following conditions:

(1)     since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (1) of Article 3, the subsequent audited annual report reveals that its shareholders’ equity turns positive;

(2)     since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (2) of Article 3, the subsequent audited annual report reveals that such circumstance no longer exists;

(3)     since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (3) of Article 3, the subsequent audited annual report reveals that the company’s outstanding external guarantee (excluding those included in the consolidated financial statements) falls below RMB 50 million or 50 percent of its net asset value;

(4)     since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (4) of Article 3, the subsequent audited annual report reveals that the capital misallocated by the company to its controlling shareholder and other related parties has been repaid;

(5)     for a period of 12 months since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (5) of Article 3, the company receives no more public censure by the Exchange;

(6)     for a period of 90 trading days since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (6) of Article 3, the company’s shares close above the par value for 20 trading days in a row; or 

(7)     within a period of 120 trading days since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (7) of Article 3, the cumulative trading volume of its shares in 90 consecutive days exceeds 3 million shares.

 

Article 8 An announcement shall be made by the company on the next day after it applies to the Exchange for lifting the delisting risk warning.   

 

Article 9 When the Exchange has approved the company’s application to lift the delisting warning, an announcement shall be made by the company at least one day before such warning is lifted. 

 

Article 10 Where a listed company applies for lifting the delisting risk warning pursuant to (1), (2), (3) or (4) of Article 7 and is granted so, but the audit report on the subsequent annual report reveals abnormal operation of its principal business, the Exchange will put its shares under special treatment pursuant to Section 13.3.1 of the Listing Rules.
 

Chapter III  Suspension of Listing

 

Article 11 The Exchange will suspend listing of the shares of a company if any of the following applies:

(1)     since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (1) of Article 3, the subsequent audited annual report reveals further negative shareholders’ equity;

(2)     since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (2) of Article 3, an adverse opinion or a disclaimer of opinion on the company’s subsequent annual report is once again issued by the certified public accountant and the circumstance is deemed serious by the Exchange; 

(3)     since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (3) of Article 3, the subsequent audited annual report shows that its outstanding external guarantee (excluding those included in the consolidated financial statements) remains above RMB 100 million and 100 percent of its net asset value;

(4)     since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (4) of Article 3, the subsequent audited annual report shows that the capital misallocated by the company to its controlling shareholder and other related parties exceeds RMB 20 million and 50 percent of its net asset value; or

(5)     within 12 months since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (5) of Article 3, the company receives further public censure by the Exchange.
  

Article 12 Upon occurrence of any of the circumstances set out in (1), (2), (3) and (4) of Article 11, the company shall, after its board of directors has deliberated its annual report, report to the Exchange and make a public announcement in a timely manner.

 

Concurrent with the release of its annual report, a risk warning announcement shall be made by the company that its shares are likely to be suspended from listing.

 

At the release of its annual report, the Exchange will suspend trading of the company’s shares and derivatives. A decision will be made within 15 trading days whether or not listing suspension is imposed.

 

Article 13 Upon occurrence of the circumstance specified in (5) of Article 11, the company shall make a risk warning announcement in a timely manner that its shares are likely to be suspended from listing. Trading in the company’s shares and derivatives is suspended from the date of announcement onward.

 

The Exchange will decide whether or not to suspend listing of the company’s shares within 15 trading days of its trade suspension.

 

Article 14 Since the delisting warning is imposed, the company shall, at least within the first five trading days of each month, disclose the measures taken for resuming listing and the progress of relevant work.

Chapter IV  Resumption of Listing

 

Article 15 A company may file an application with the Exchange for resumption of listing if it meets any of the following conditions:

(1)     after the listing suspension as a result of the occurrence of the circumstance specified in (1) of Article 11, the subsequent audited half-year report reveals positive shareholders’ equity;

(2)     after the listing suspension as a result of the occurrence of the circumstance specified in (2) of Article 11, the subsequent audited half-year report shows that such circumstance no longer exists;

(3)     after the listing suspension as a result of the occurrence of the circumstance specified in (3) of Article 11, the subsequent audited half-year report shows that the company’s outstanding external guarantee (excluding those included in the consolidated financial statements) falls below RMB 50 million or 50 percent of its net asset value;  

(4)     after the listing suspension as a result of the occurrence of the circumstance specified in (4) of Article 11, the subsequent audited half-year report shows that the capital misallocated by the company to its controlling shareholder and other related parties has been repaid; or

(5)     within 12 months after the listing suspension as a result of the occurrence of the circumstance specified in (5) of Article 11,  the company receives no more public censure by the Exchange.

 

Article 16 Once a company’s application for resumption of listing is approved by the Exchange, the company may file an application with the Exchange for lifting the delisting risk warning pursuant to (1), (2), (3), (4) or (5) of Article 7.
 

Chapter V  Termination of Listing

Article 17 The Exchange will terminate listing of a company’s shares if any of the following applies:

(1)     since the company’s shares are suspended from listing as a result of the occurrence of the circumstance specified in (1) of Article 11, the shareholders’ equity remains negative as revealed in the subsequent audited half-year report;

(2)     since the company’s shares are suspended from listing as a result of the occurrence of the circumstance specified in (2) of Article 11, the auditor once again issues an adverse opinion or a disclaimer of opinion on the company’s subsequent half-year report, and the circumstance is deemed serious by the Exchange;

(3)     since the company’s shares are suspended from listing as a result of the occurrence of the circumstance specified in (3) of Article 11, the company’s outstanding external guarantee (excluding those included in the consolidated financial statements) exceeds RMB 50 million and 50 percent of its net asset value, as revealed in the subsequent audited half-year report;

(4)     since the company’s shares are suspended from listing as a result of the occurrence of the circumstance specified in (4) of Article 11, the capital misallocated by the company to its controlling shareholder and other related parties has not been completely repaid, as revealed in the subsequent audited half-year report;

(5)     within 12 months since the company’s shares are suspended from listing as a result of the occurrence of the circumstance specified in (5) of Article 11, the company receives further public censure by the Exchange;

(6)     within 90 trading days since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (6) of Article 3, the company’s shares never close above the par value for 20 consecutive trading days;

(7)     within a period of 120 trading days since the company is imposed a delisting risk warning as a result of the occurrence of the circumstance specified in (7) of Article 3, cumulative trading volume of the company’s shares falls below 3 million shares; or

(8)     since the company’s shares are suspended from listing as a result of the occurrence of the circumstance specified in (1), (2), (3), (4) or (5) of Article 11, the company fails to release the subsequent audited half-year report within the statutory period.

 

Article 18 Upon occurrence of any of the circumstances set out in (1), (2), (3) and (4) of Article 17, the company shall, after its board of directors has deliberated its half-year report, report to the Exchange and make relevant disclosure in a timely manner along with a risk warning announcement that it’s shares are likely to be terminated from listing.

 

Upon occurrence of any of the circumstances set out in (5), (6) and (7) of Article 17, the company shall submit the opinion of its board of directors in writing to the Exchange and make relevant disclosure in a timely manner along with a risk warning announcement that its shares are likely to be terminated from listing.

 

The company’s shares and derivatives are suspended from trading from the date of announcement onward. The Exchange will, within 30 trading days from the date of trade suspension, make a decision on terminating listing of the company’s shares based on the opinions of the Exchange Listing Committee.

 

Article 19 Upon occurrence of the circumstance specified in (8) of Article 17, the company’s shares are suspended from trading from the end of the statutory disclosure period onward. The Exchange will, within 15 trading days since the trade suspension, make a decision on terminating listing of the company’s shares based on the opinions of the Exchange Listing Committee.

Chapter XI  Supplementary Provisions

 

Article 20 These Special Regulations come into force subject to the approval of the Exchange Board and the CSRC. The same applies to any alteration hereof.

 

Article 21 The power of interpretation of these Special Regulations rests with the Exchange.

 

Article 22 These Special Regulations are implemented as of January 1, 2007.