Shanghai Stock Exchange releases "Implementation Measures for the Underwriting of Shanghai Market IPOs"

shanghai stock exchange announcement on the release of the "Shanghai Stock Exchange Implementation Rules for the Issuance of Shares for the First Time (Revised in 2024)" on August 16. It pointed out that the lead underwriters should require eligible investors and their managed allocation targets participating in the offline issuance business for the next issue to have an average daily market value of non-restricted A-shares and non-restricted depositary receipts of the Shanghai market totaling at least RMB 60 million two trading days before the start of the preliminary inquiry for the next issue, including the base date. For thematic closed-end funds such as science and technology innovation and entrepreneurship, the average daily market value of non-restricted A-shares and non-restricted depositary receipts of the Shanghai market held in the 20 trading days before the base date (including the base date) should be at least RMB 10 million. In addition to meeting the market value requirement mentioned above, investors and their managed allocation targets participating in the Science and Technology Innovation Board's offline issuance business should also be required to have an average daily market value of non-restricted A-shares and non-restricted depositary receipts of the Science and Technology Innovation Board totaling at least RMB 6 million in the 20 trading days before the base date (including the base date). Original text: Notice on the Release of the "Shanghai Stock Exchange Implementation Rules for the Issuance of Shares for the First Time (Revised in 2024)" SSE Notice [2024] No. 112 All market participants: In order to implement the opinions of the China Securities Regulatory Commission on the deepening of reforms for the Science and Technology Innovation Board and to serve the development of technology innovation and new productive forces, and improve the value-based allocation arrangement of new shares on the Science and Technology Innovation Board, Shanghai Stock Exchange and China Securities Registration and Clearing Corporation Limited have revised and issued the "Shanghai Stock Exchange Implementation Rules for the Issuance of Shares for the First Time (Revised in 2024)" (see attached), which will be implemented from October 1, 2024. The "Shanghai Stock Exchange Implementation Rules for the Issuance of Shares for the First Time (Revised in 2023)" (SSE Notice [2023] No. 36) issued on February 17, 2023 will be simultaneously abolished. This notice is hereby given. Shanghai Stock Exchange Implementation Rules for the Issuance of Shares for the First Time (Revised in 2024) Chapter I General Provisions Article 1 In order to regulate the offline issuance business of companies intending to list on the Shanghai Stock Exchange (hereinafter referred to as the SSE) for the first time and improve the efficiency of offline subscription and fund settlement for the first issuance of shares, these rules are formulated in accordance with the "Administrative Measures for the Issuance and Underwriting of Securities", the "Administrative Measures for the Registration of Initial Public Offerings of Shares", the "Implementation Rules for the Issuance and Underwriting of Securities for the First Public Offering on the Shanghai Stock Exchange" (hereinafter referred to as the "First Issue Underwriting Implementation Rules") and other relevant provisions. Article 2 These rules apply to the inquiry, subscription, fund collection and payment, and initial registration of securities for the first public offering of shares and depositary receipts completed through the business management system platform of the SSE (issuance and underwriting business), the internet trading platform (IPO offline inquiry and subscription platform), and the Shanghai Branch of China Securities Registration and Clearing Corporation Limited (hereinafter referred to as ChinaClear) registration and settlement platform. Article 3 Investors participating in the offline issuance business for the first public offering of shares and their managed securities investment products (hereinafter referred to as the allocation targets) shall comply with the relevant provisions of the "Administrative Measures for the Issuance and Underwriting of Securities" and other regulations. Article 4 Security settlement banks that have applied in writing to and obtained approval from the Shanghai Branch of ChinaClear can be referred to as settlement banks for offline issuances as referred to in these rules. Chapter II Basic Provisions Article 5 Upon written commission from the lead underwriters, the SSE provides eligible investors with the subscription platform to make price quotes and subscriptions. Article 6 Upon written commission from the lead underwriters, the Shanghai Branch of ChinaClear provides the registration and settlement platform to collect the funds raised from the offline issuance for the lead underwriters. Upon written commission from the issuer, the Shanghai Branch of ChinaClear completes the initial registration of shares based on the offline allocation results provided by the lead underwriters. Article 7 Information about investors and allocation targets is based on data registered with the China Securities Association. The SSE obtains related information about investors and allocation targets from the China Securities Association. The lead underwriters shall verify the eligibility of investors based on the pre-announced quotation conditions, assume responsibility for information disclosure, and confirm the relevant information of investors intending to participate in the offline issuance. Article 8 According to the regulations of the China Securities Association, the lead underwriters should require eligible investors and their managed allocation targets participating in the offline issuance business for the next issue to have an average daily market value of non-restricted A-shares and non-restricted depositary receipts of the Shanghai market totaling at least RMB 60 million two trading days before the start of the preliminary inquiry for the next issue, including the base date. Thematic closed-end funds such as science and technology innovation and entrepreneurship should have an average daily market value of non-restricted A-shares and non-restricted depositary receipts of the Shanghai market totaling at least RMB 10 million in the 20 trading days before the base date (including the base date). In addition to meeting the market value requirement mentioned above, investors and their managed allocation targets participating in the Science and Technology Innovation Board's offline issuance business should also have an average daily market value of non-restricted A-shares and non-restricted depositary receipts of the Science and Technology Innovation Board totaling at least RMB 6 million in the 20 trading days before the base date (including the base date). The above-mentioned market value of investors and their managed allocation targets should not be lower than the market value requirement determined and announced by the issuer and the lead underwriters in advance. For investors and their managed allocation targets participating in the offline subscription business, the calculation of the total market value of non-restricted A-shares and non-restricted depositary receipts of the Shanghai market should follow the market value calculation rules specified in the "Shanghai Stock Exchange Implementation Rules for Online Issuance of Shares for the First Time (Revised in 2023)". Article 9 The lead underwriters use the business management platform to communicate with the registration and settlement platform towards the submitted applications for offline subscription.The platform provides information including the name of the subscription object, the securities account of the subscription object, the bank payment account, and the stock code. After the above information is forwarded to the settlement bank by the registration and settlement platform, the settlement bank is responsible for conducting compliance checks on the bank accounts for funds received and paid by the subscription object.enth Article The main underwriter participating in the offline issuance of shares for the first time shall apply to the Shanghai Stock Exchange for the CA certificate of the business management platform. After the offline investors have completed the registration with the China Securities Association, the underwriter shall apply for the CA certificate of the purchase platform on their behalf. Institutions with both offline investors and main underwriters identities should apply separately. The CA certificate can be used multiple times in the initial public offering. Offline investors can use this CA certificate to log in to the purchase platform to participate in bidding and purchasing. The main underwriter can use this CA certificate to log in to the management platform for data exchange. Article 11 The main underwriter and settlement bank participate in the China Clearing Shanghai Branch through the Participant Remote Operation Platform (referred to as PROP), and complete the relevant data exchange with the registration and settlement platform. Chapter Three Inquiry and Purchase Article 12 If the issuer and the main underwriter determine the stock issuance price by inquiring with offline investors, they can determine the issuance price either by accumulating bid inquiries after determining the price range in the preliminary inquiry and distributing stocks to the objects participating in the cumulative bid inquiry, or by determining the issuance price through the preliminary inquiry and distributing stocks to the objects participating in the subscription. If the pricing of the initial public offering of shares is done through direct pricing, after deducting the follow-up portion of the sub-companies related to the Science and Technology Innovation Board underwriters, all stocks to be issued will be directly priced and issued to online investors, and no offline issuance will be arranged. Article 13 The issuer and main underwriter can publish the prospectus and issuance announcement only after determining the stock code. Article 14 Offline investors participating in the preliminary inquiry must meet the following conditions: (1) Completed registration with the China Securities Association before 12:00 on the trading day before the start of the preliminary inquiry; (2) Meet the holding market value requirements determined and announced by the issuer and main underwriter in advance; (3) Have a CA certificate user account; (4) Other conditions specified by the issuer and main underwriter. Article 15 The main underwriter shall enter the holding market value parameter standards before 10:00 on the prospectus publication date, submit and confirm the preliminary inquiry parameters such as stock code and issuer name, and initiate the offline issuance. The main underwriter should exclude ineligible offline investors and their allotted objects before 21:00 on the trading day before the preliminary inquiry start date, and complete the preliminary confirmation. The management platform will automatically verify the eligibility of the offline investors and their allotted objects based on the holding market value parameter standards confirmed by the main underwriter, and ineligible ones will be excluded. Article 16 During the preliminary inquiry, offline investors and their managed allotted objects should provide bid quotes including the purchase price and the corresponding number of shares to be purchased. Non-individual investors should provide bid quotes as an institution, and the number of shares to be purchased by each allotted object should not exceed the initial issuance quantity. Offline investors can submit separate bids for each of their managed allotted objects, with a maximum of three different bid prices in all bids submitted by the same offline investor. After entering the bid quotes for all allotted objects they wish to participate in quoted prices for, offline investors must submit them at once. Normally, bid quotes should not be modified after submission, but if it is necessary, the reason for the modification should be provided on the subscription platform. After the deadline for the preliminary inquiry, the main underwriter can access the bid quote situation. Article 17 After the deadline for the preliminary inquiry, the main underwriter should exclude preliminary inquiry bid quotes and their corresponding intended purchase quantities that do not meet the conditions for cumulative bid inquiry or pricing purchase within the scope of eligible offline investors and allotted objects, in accordance with relevant provisions of the "Regulations on the Administration of Securities Issuance and Underwriting," and the effective bid conditions determined and announced by the issuer and main underwriter. The main underwriter shall send the information of the allotted objects managed by excluded offline investors to the registration and settlement platform by 15:00 on T-1 day (where T day is the subscription day), where each allotted object can only correspond to one bank payment account. The registration and settlement platform shall verify the validity of the allotted objects' securities account codes and provide the main underwriter with the verification results, and then provide the settlement bank with the information of the allotted objects with valid securities account codes. Article 18 Before 15:30 on T-1 day, the main underwriter shall enter and submit the determined stock issuance price range (or issuance price), the quantity of offline issued stocks, and other subscription parameters. The quantity of offline issued stocks shall be determined by the issuer and main underwriter based on relevant principles previously determined and announced and adjusted after a review of the initial offline issuance quantity. Before 9:30 on T-day, the management platform shall automatically exclude bid quotes from allotted objects during the preliminary inquiry stage that are lower than the issuance price determined by the issuer and main underwriter or lower than the lower limit of the issuance price range. Article 19 The offline subscription day for new stock issuance is the same as the online subscription day, with the subscription time from 9:30 to 15:00 on T day. During the subscription period, offline investors can submit a purchase price for each allotted object they manage, corresponding to a purchase quantity, or submit a purchase quantity based on the issuance price. Investors do not need to pay the subscription funds at the time of subscription. If the "intended purchase quantity" corresponding to the effective bid price in the preliminary inquiry does not exceed the quantity of offline issued stocks, the subscription quantity should not be lower than the "intended purchase quantity" and highger than the maximum subscription quantity per allotted object determined by the main underwriter and not higher than the quantity of offline issued stocks. If the "intended purchase quantity" of an allotted object exceeds the quantity of offline issued stocks, the subscription quantity should be the quantity of offline issued stocks. After entering the subscription records for all allotted objects they wish to participate in subscription for, offline investors should submit them all at once. During the offline subscription period, offline investors can submit subscription records multiple times, but the final submission will be deemed as the valid one. Article 20 Between 9:30 and 15:00 on T-day, the main underwriter can dynamically inquire about the subscription situation and can query and download the subscription results after 15:00 on T-day. Article 21 The issuer and main underwriter shall conduct offline allotment according to the predetermined principles. The main underwriter shall conduct offline allotment according to the predetermined principles. The main underwriter shall conduct offline allotment according to the predetermined principles. The main underwriter shall conduct offline allotment according to the predetermined principles. The main underwriter shall conduct offline allotment according to the predetermined principles. The main underwriter shall conduct offline allotment according to the predetermined principles.Before 3:00 PM on the first day, upload the payment situation of the allocation objects under the net, including the issue price, allocated number of shares, allocation amount, securities account, allocation object ID code, and other data. The business management platform is required to send this information to the registration and settlement platform before 3:30 PM. Each net investor can check the allocation and payment situation of the allocation objects managed by them through the subscription platform.Underwriters are required to announce to the market the allocation and payment status of investors who participated in the offline subscription on T+2. Article 22 For each stock offering, investors who have participated in the offline subscription and their related accounts are not allowed to purchase new shares through online subscription. A related account of an investor is a securities account with the same "account holder name" and "valid identity document number" as the investor's securities account registration information. Chapter IV Collection and Payment of Funds Article 23 China Securities Depository and Clearing Shanghai Branch opens a special account for offline subscription funds with a settlement bank for the receipt and payment of offline subscription funds; opens a general account for offline subscription funds within the settlement system and sets up detailed accounts for each investor for the calculation of offline subscription funds. Article 24 Underwriters shall provide relevant information of investors to the settlement bank as required by Article 9 and Article 17 of these detailed rules, as a basis for the settlement bank to review the compliance of investors' bank accounts for payments. Article 25 Before 16:00 on T+2, offline investors should fully pay the new share subscription funds for the allocated investors based on the allocation and payment status. When transferring subscription funds, investors should transfer the subscription funds corresponding to the allocated stocks to the special account for offline subscription established by China Securities Depository and Clearing Shanghai Branch with the settlement bank, and indicate the corresponding securities account and stock code in the payment voucher remarks column. Failure to indicate or provide incorrect information may result in a failed transfer. An investor can only transfer subscription funds through one settlement bank, and investors must transfer subscription funds out and in through registered bank accounts. Issuers and underwriters should clearly specify the requirements for payment of subscription funds in the issuance announcement. Article 26 Based on the information provided by the underwriters, the settlement bank conducts compliance checks on the bank accounts of each investor. If passed, the subscription funds are credited to the special account for offline subscription opened by China Securities Depository and Clearing Shanghai Branch with the settlement bank, and an electronic notification of the credit is sent to China Securities Depository and Clearing Shanghai Branch. This notification must clearly specify the general account for offline subscription funds of China Securities Depository and Clearing Shanghai Branch, the investor's subscription securities account and the subscription securities stock code, and retain relevant payment vouchers. If failed, the settlement bank will return the payment. Article 27 China Securities Depository and Clearing Shanghai Branch calculates the subscription amount of each investor in real-time based on the electronic notification from the settlement bank, and underwriters can query the subscription status of each investor through the PROP comprehensive business terminal in real-time; offline investors can query the subscription status of the allocated investors they manage through the subscription platform. Article 28 After 17:30 on T+2, underwriters can obtain the subscription fund arrival status of each investor until 16:00 on T+2 through their PROP mailbox. If an allocated investor fails to fully pay the subscription funds by 16:00 on T+2, the allocated shares corresponding to the uncollected funds will be underwritten by the underwriters or handled in other ways determined and disclosed by the issuer and underwriters in advance. Article 29 Before 14:00 on T+3, underwriters upload the final confirmed allocation result data, including the issue price, allocated number of shares, subscription funds, securities account, restricted period for allocated shares, investor's identification code, etc., and the data is forwarded by the business management platform to the registration and clearing platform. Underwriters should announce the offline subscription results to the market after the completion of the offline subscription. Article 30 After providing the allocation result data according to Article 29 of these detailed rules, the registration and clearing platform will provide the refund amount to each investor and the total amount raised by the underwriters in the offline issuance to the relevant settlement bank by 10:00 on T+4, unit of banking institution for each investor's subscription payment. If underwriters fail to provide the allocation result data within the specified time, resulting in a delay in refunds by China Securities Depository and Clearing Shanghai Branch, any losses incurred by investors due to this delay will be borne by the underwriters. Article 31 On T+4, the settlement bank processes the investor refunds based on the electronic refund details data provided by the underwriters through the registration and clearing platform, in accordance with the original remittance vouchers for investors, and processes the transfer of funds raised by the underwriters in the offline issuance to the bank account specified by the underwriters through the registration and clearing platform. Article 32 The interest income generated from the subscription funds of offline issuance shall be transferred to the Securities Investor Protection Fund by China Securities Depository and Clearing Shanghai Branch in accordance with relevant regulations. Chapter V Share Registration Article 33 Underwriters should send the offline subscription results data in accordance with Article 29 of these detailed rules, and ensure that the data sent is true, accurate, and complete. The registration and clearing platform processes the initial registration of shares in the offline issuance based on the offline subscription results data forwarded by the Shanghai Stock Exchange. Any legal responsibility arising from incorrect data sent by underwriters for offline subscription results shall be borne by the underwriters. For shares underwritten by underwriters according to Article 28 of these detailed rules or handled in other ways, after underwriters have completed the transfer of relevant funds with the issuer, the issuer shall submit a share registration application to China Securities Depository and Clearing Shanghai Branch, based on which China Securities Depository and Clearing Shanghai Branch completes the registration of the corresponding shares. Chapter VI Supplementary Provisions Article 34 In case of force majeure, accidents, technical failures, human errors, etc., leading to the inability to proceed with the new share issuance as usual, or if the Shangai Stock Exchange decides to temporarily suspend trading, the provision of offline subscription services for initial public offering of shares may be suspended or the inquiry, subscription, and listing dates may be postponed. Once the above conditions are resolved, the Shanghai Stock Exchange may decide to resume the services. Except for special circumstances recognized by the Shanghai Stock Exchange, any subscription data or other information accepted by the subscription platform before the suspension of services by the Shanghai Stock Exchange will automatically become invalid. If only the offline inquiry and subscription services are suspended and resumed on the same day, investors can continue to provide quotes and subscribe after the services are restored, and the quotes and subscriptions on the same day will remain valid. Any losses incurred due to abnormal situations and measures taken by the Shanghai Stock Exchange and China Securities Depository are not assumed by the Shanghai Stock Exchange and China Securities Depository in accordance with the law. english:Article 35 In case of suspension, postponement, or suspension of the issuance and listing of new shares involving the return of subscription funds to investors and cancellation of subscribed shares, the Shanghai Stock Exchange and China Securities Depository and Clearing Corporation Limited shall handle the relevant business with assistance from the issuer and lead underwriter based on relevant regulations. Article 36 If the issuer and lead underwriter have special requirements for the arrangement of offline issuance, they shall communicate in a timely manner with the Shanghai Stock Exchange and China Securities Depository and Clearing Corporation Limited Shanghai Branch and negotiate to determine the specific operational methods. Article 37 If the lead underwriter or offline investors violate this detailed rule, the Shanghai Stock Exchange may, in accordance with the Implementation Rules of Underwriting for Initial Public Offerings and other regulations, adopt daily regulatory measures, regulatory measures, discipline measures and other self-discipline measures. Article 38 This detailed rule shall be interpreted by the Shanghai Stock Exchange and China Securities Depository and Clearing Corporation Limited. Article 39 This detailed rule shall be implemented as of October 1, 2024. The previously revised "Implementation Rules for Offline Issuance of Initial Public Offering Stocks in Shanghai Market (2023)" (SSE Notice [2023] No. 36) is simultaneously repealed. In case of any inconsistencies between the relevant regulations issued by the Shanghai Stock Exchange and China Securities Depository and Clearing Corporation Limited regarding the subscription of initial public offering stocks and this detailed rule, this detailed rule shall prevail. This article is sourced from the official website of the Shanghai Stock Exchange, edited by GMTEight: Chen Xiaoyi.