Research On GEM Listed-company Delisting Legal System

There must be listing and delisting in a healthy and mature stock market. Thetwo sets of law system are necessary part of securities law system. Reasonableexit-mechanism protects the metabolism of the stock market. China’s GEM delistingsystem based on the main board delisting system. They are basically the same inframework and the main content. With the development of capital market reform, themain board delisting system has a lot of problems. Listed companies delisting-rate isvery low, and the “shell resource” speculation is very common. The normal order ofthe capital markets and rational investment philosophy has been disrupted. If we donot improve and refine the GEM delisting system, the above problem should reappear.In terms of market performance, there have been ‘three highs’ characteristics (highissue price, high price-earnings ratio, high book value). But in this marketenvironment, there is no delisting of any listed company, it seems to have formed thestrange phenomenon-“enter without exit”. The above situation has indicated that,china’s GEM delisting system is an urgent need to improve.‘Securities Law’,‘GEM Stock Listing Rules’ made a series of provisions aboutthe delisting system, completed the initial establishment of the GEM delisting system.At the end of2011, the SFC issued a ‘GEM delisting system’ for comments. GEMdelisting system has become a regulatory focus and hot spot, in this situation, theauthor combined with China’s actual situation, learn from the experience of theextraterritorial mature securities market, and proposed measures to improve the GEMdelisting system.In addition to the foreword and afterword, the full text of the main body isdivided into three parts:The first part is the overview of GEM delisting system, describing the concept,function of delisting, and the difference between the main board delisting, small boarddelisting. The analysis of concept helps to clarify the research object. The research ofdelisting function helps to explain the necessary value of delisting. Then the authordescribes the difference between the GEM delisting and main board delisting.The second part describes the establishment of GEM delisting system in China.Because GEM delisting system and main board delisting system associated with a high degree, to analyze the establishment of GEM delisting system, we must examinethe system prototype-main board delisting system. The author briefly reviews andevaluates the main board delisting system, then analyses the development of GEMdelisting and shows the status of the delisting system.The third part the author analyses the status of the delisting system, learns fromthe design of extraterritorial mature GEM delisting system, and proposedimprovement measures. First, we must accelerate the marketization of companylisting. Listing and delisting interrelated. Market-oriented listing system leads tohealthy delisting system. Second, we must establish pluralistic and market-orienteddelisting standard, which determines the listed companies to exit or not. The degree ofperfection of it determines the quality of the system. To the comprehensiveconsideration of the company situation, it requires a variety of criteria. And it must bemarket-oriented determined by the equal entities. It focuses on operating capacity andmarket acceptance. On this basis, the author analyses the specific delisting conditionsin China. Third, the delisting cycle should be shortened. Due to the higher risk ofGEM, in order to avoid low-quality listed companies exist of a long time; delistingcycle of GEM should be shortened. Fourth, the delisting decision and reviewprocedure should be improved. The delisting decision entity shall be borne by thestock exchange. And the decision and review procedures shall be improved on thebasis of protecting the legitimate rights of listed companies. Fifth, establish areasonable risk warning mechanism, and set the delisting consolidation period andconsolidation board, and improve the release process of delisting risk. Sixth, thedelisting way should be reasonable arranged. Taking into account the factor of theconstruction of the OTC market and investor protection, the directly delisting systemshould be implemented. Seventh, the auditing of relisting should be improved. Thenet profit excluding non-recurring gains and losses determines profit or not. Andbackdoor listing is prohibited.