The China Securities Regulatory Commission ("CSRC") has recently drafted and issued the Special Provisions on Issuance and Underwriting of Initial Public Offerings of Securities on the ChiNext Board (Draft for Comment) (the "Draft for Comment") for public comment by June 6, 2020.
The Draft for Comment is applicable to enterprises registered under the Administrative Measures for the Registration of Initial Public Offerings on the ChiNext Board (for Trial Implementation). Two principal systems proposed by the Draft for Comment are: 1. reproducing and improving according to the actual situation, the main rules for the SSE STAR Market; and 2. making the institutional arrangements more inclusive, in light of the characteristics of the reform of current listings on the ChiNext Board. As to the first point, the Draft for Comment proposes: 1. carrying on and promoting the main rules for the SSE STAR Market; 2. authorizing the exchange to establish indicators and set out other requirements; and 3. optimizing certain rules. When it comes to the second point, the Draft for Comment expressly states that: 1. the existing direct pricing system for the ChiNext Board will be retained; and 2. the response mechanism for drastic market changes will be refined.