Refinancing Ushers In Classified Audit, And High-Quality Enterprises Take "Fast Track"

The classification review of refinancing will be formally implemented.

On the evening of September 25, China Securities Regulatory Commission (CSRC) issued an article on its official website, pointing out that the CSRC will carry out classified review on refinancing of listed companies. When examining and approving the application for non-public offering of shares of listed companies on the main board (small and medium-sized board), the newly accepted listed companies with evaluation results of a in the last two consecutive information disclosure work evaluation periods shall be quickly reviewed.

This is another major measure taken by China Securities Regulatory Commission (CSRC) to further reduce the review cycle of refinancing of listed companies, facilitate refinancing of listed companies, and give greater support to listed companies to make better use of the capital market.

Since this year, the production and operation of many listed companies have been affected by the epidemic, and some small and medium-sized enterprises with weak cash flow are facing even greater financial pressure. It is urgent to transfuse the real industry through the capital market.

The executive meeting of the State Council held on September 23 proposed three major tasks around the construction of a standardized, transparent, open, dynamic and resilient capital market. One of the important tasks is to "promote the listed companies to become better and stronger" and "improve the refinancing and debt issuance systems of listed companies".

More efforts have been made to relax refinancing

On the evening of September 25, the classification review rules for refinancing of listed companies will be officially released.

It is understood that the refinancing application of a listed company with the evaluation result of a in two consecutive evaluation periods of information disclosure work will be rapidly reviewed by the CSRC.

Specifically, for the application of non-public offering of shares of listed companies that are subject to rapid examination, the CSRC focuses on whether the issuance meets the requirements of laws and regulations. Except for the problems that may affect the conditions of issuance or other major issues, in principle, no written feedback will be sent and it will be directly submitted to the preliminary review committee for review.

This means that the A-share main board and small and medium-sized board listed companies with "excellent" information disclosure will enjoy the "green channel" treatment of refinancing.

"From the next working day (September 27), the issuance department of the CSRC will start trial classification examination when accepting the refinancing applications of listed companies," said fan Zhongchao, deputy director of the issuance department of the CSRC.

As an important economic entity to drive domestic development, how to rely on the capital market effectively to become bigger and stronger has always been the focus of all walks of life. As early as the beginning of this year, the China Securities Regulatory Commission (CSRC) officially issued new regulations on refinancing, moderately relaxing the scale and audit restrictions on the financing of non-public offerings of listed companies, so as to supplement the operation blood for the listed companies to overcome the operating difficulties and continue to grow bigger and stronger.

At that time, many people in the industry predicted that 2020 would be a big year for equity financing, and the scale of refinancing was expected to hit a trillion yuan mark.

However, according to wind data of 21st century economic report, as of September 25, 2020, the number of entrepreneurs who have completed additional issuance in A-share market is only 187, with a total amount of funds raised about 522.310 billion yuan, a slight increase of 9.10% compared with the same period last year (163 enterprises completed additional issuance from January to September 25, 2019, with a total amount of fundraising of 479.041 billion yuan).

However, the demand for refinancing is still hot. According to the statistics of 21st century economic report, since this year, 838 additional issuance plans have been issued in the A-share market, and the amount of capital to be raised is as high as 1.08 trillion yuan.

"The classified review of refinancing is the continuation of this year's new policy of refinancing deregulation. The regulatory authorities have repeatedly reiterated that it is necessary to speed up the refinancing audit and increase the refinancing intensity of enterprises. The improvement of the efficiency of the refinancing audit is a continuation of the policy loosening in the early stage. There are still actions to be taken in the follow-up, such as further reducing the refinancing review cycle, so as to ensure that more high-quality enterprises can start the issuance work earlier 。” Beijing a large securities firm investment banking department of the 21st century economic reporter pointed out.

Strengthen the quality of information disclosure

It is worth mentioning that although the classification audit has improved the efficiency of refinancing audit, it does not mean to relax the audit, but focuses on "strictly grasping the credit" and carrying out the refinancing audit work with a targeted target.

According to the information released by the CSRC, only "the listed companies whose evaluation results are a in the last two consecutive evaluation periods of information disclosure" can obtain the rapid audit channel.

According to the assessment results of information disclosure of Listed Companies in 2019 released by Shenzhen Stock Exchange, among 2196 listed companies in Shenzhen Stock Exchange, 387 companies with assessment result of a, accounting for 17.62%; 1400 companies with assessment result of B, accounting for 63.75%; 314 companies with assessment result of C, accounting for 14.30%; 95 companies with assessment result of D, accounting for 4.33%. Judging from the assessment of Listed Companies in recent years, there are 178 a Companies in recent three consecutive years, accounting for 8.58%.

Looking back on the years before the outbreak of refinancing in the A-share market, there have been many problems such as real debt, low efficiency of capital utilization, over financing and sequelae caused by random M & A with raised funds. The regulator has obviously paid attention to the crux of this problem. The CSRC has repeatedly stressed that it will continuously improve the daily supervision system of listed companies, strictly control the conditions for refinancing and issuing of listed companies, strengthen the information disclosure requirements of listed companies, strengthen the on-site inspection of the use of refinancing funds, and strengthen the supervision of illegal acts such as "clear shares and real debts".

As a matter of fact, the rule arrangement for the classification of corporate refinancing audit through information disclosure is also in line with the concept of "strengthening the quality of information disclosure" in the era of registration system. The implementation of "classified review of refinancing" has been interpreted by many industry insiders as "the prelude to comprehensively promoting the registration system".

"The hierarchical review of refinancing will speed up the quality of Xinpi high-quality companies and make their financing more convenient. These are important measures to improve the quality of listed companies. Listed companies are the foundation of the capital market, and we should help the fittest and eliminate the bad in policy. In addition, the core of the system is to set up a list of good and bad information, that is to say, the core of the system is to set up a list of rewards and punishments Wang Jiyue, a former senior investment banker, pointed out in an interview.

Fan Zhongchao also stressed: "listed companies should improve the quality of information disclosure and ensure that they disclose or provide information truthfully, accurately, completely, timely and fairly. Recommendation agencies and securities service institutions should conscientiously perform their duties and improve the quality of the application documents of listed companies that are suitable for rapid examination. The CSRC will severely punish the relevant subjects in accordance with the law. "