In order to guide shareholders of STAR Market companies to transfer in an orderly manner in compliance with laws and regulations, introduce institutional investors to undertake investment, and better maintain market order and protect investors' interests, under the overall guidance of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) has revised and improved the Implementation Rules for Share Reduction by Shareholders of Listed Companies on the STAR Market of the Shanghai Stock Exchange by Inquiry Transfer and Placement to Specific Institutional Investors (hereinafter referred to as the Implementation Rules) to optimize the relevant operating procedures and information disclosure requirements for price-inquiry transfers on the STAR Market, and coordinated matters including the window period regulations and the application of depository receipt rules.
Inquiry transfer is an innovative institutional arrangement on the STAR Market. The Implementation Rules was first published and implemented in July 2020. As the system has been in operation for more than two years, up to now, a total of 25 shareholders of STAR Market companies have completed 37 inquiry transfers, with a total transaction value of more than 20 billion yuan. From the perspective of practical effect, the inquiry transfer system has positive significance in promoting the orderly "relay" between early investors and long-term investors, alleviating the pressure of share reduction, optimizing investor structure, and maintaining the stability of the STAR Market.
This revision of the system takes into account the positive effect of inquiry transfer on the STAR Market in balancing the demands of shareholders to reduce their holdings and the protection of the interests of small and medium investors, aiming to further optimize the system design, enhance investors' sense of gain, improve the attractiveness of the system, and guide shareholders of STAR Market companies, especially leading companies and heavyweight companies, to reduce their holdings by inquiry transfer, and guide shareholders using other means, especially auction, to shift to using inquiry transfer for share reduction. The main modifications are as follows:
The first is to get in line with the provisions on the "window period" prohibiting transactions. According to the Securities Law and Rules for Management on Shares Held by Directors, Supervisors and Senior Management of Listed Companies and Their Changes, the regular report is revised to annual report and semi-annual report, and the window period of the quarterly report is clarified as "within 10 days before the announcement", deleting the requirement of "no trading within 2 days after the disclosure of major events".
The second is to optimize relevant information disclosure and operational process requirements. It mainly includes optimizing the disclosure requirements for the lower limit of the inquiry transfer price in the inquiry transfer plan, no longer requiring the disclosure of the transferee in the pricing reminder announcement, and canceling the time interval between the issuance of the subscription invitation and the quotation deadline, etc., to facilitate transactions, reduce transaction costs，and improve market efficiency.
The third is to extend the scope of application to depository receipts. The reduction of holding in depository receipts was not included in the previous rule-making process. Based on the existing practice, depository receipts are included in the scope of application this time.
This revision of the system has basically left other contents of the inquiry transfer system unchanged, and relevant market players should still abide by the requirements on transferee qualification, transfer quantity, transfer price, number of parties receiving inquiry, and transferee lock-up period. In the next step, the SSE will, in accordance with the unified deployment of the CSRC, continue to evaluate and improve the STAR Market regulatory system, continuously optimize the market ecology, effectively protect the legitimate rights and interests of investors, and jointly promote the high-quality development of the STAR Market.