The Shanghai Stock Exchange ("SSE") has recently issued the Implementing Measures for Compulsorily Delisting Listed Companies with Major Violations (the "Measures"), and also released the Stock Listing Rules of the Shanghai Stock Exchange (Revised in November 2018) and the Implementing Measures of the Shanghai Stock Exchange for the Relisting of Delisted Companies (Revised in November 2018). Meanwhile, the Shenzhen Stock Exchange ("SZSE") has released its counterpart measures and relevant modified rules. The Measures has taken effect immediately from the date of issuance.
The Measures mainly clarify two circumstances triggering the compulsory delisting, one involving major securities-related violations and the other involving major violations undermining social and public security. In particular, practices of a listed company that seriously disrupt the market order or seriously damage public interests and result in huge social impacts, will be regulated as a special circumstance in which delisting will be required. In addition, the Measures state that, the Initial Public Offering Committee of the SSE will conduct a review to judge, in an independent and professional manner and in line with the criteria provided by the Measures, whether there is need to compulsorily delist the shares of a listing company committing major violations, and draw examination conclusions, based on the administrative punishment decision made by a relevant administrative organ and facts ascertained in an effective ruling rendered by the court.