LED company IPO listing: The China Securities Regulatory Commission clarified that GEM companies are not allowed to list through backdoor listings

On October 24, the China Securities Regulatory Commission issued the revised "Administrative Measures for Major Asset Restructuring of Listed Companies" and the "Decision on Amending the Administrative Measures for Acquisitions of Listed Companies" on the 24th to further promote the marketization process of mergers, acquisitions and reorganizations of listed companies, and promote listed companies to further promote industry integration and industrial upgrading.

This revision is based on the concept of "relaxing control and strengthening supervision" to further reduce and simplify administrative licensing for mergers, acquisitions and reorganizations, and make supporting arrangements in strengthening information disclosure, strengthening in-process and post-event supervision, urging intermediaries to perform their duties, and protecting the rights and interests of investors.

The new version of the merger, acquisition and reorganization system cancels the approval of major purchases, sales, and asset replacements of listed companies that do not constitute backdoor listings, and cancels the prior approval of tender offers and the approval of two exemptions for tender offers. In addition, this revision of the system also improves the market-based pricing mechanism for the issuance of shares to purchase assets, and adds pricing flexibility and price adjustment mechanism provisions for the pricing of shares issuance.

For backdoor listings, the newly issued M&A and Reorganization Measures clarify the requirements for backdoor listings to be equivalent to IPO review, and clarify that backdoor listings are not allowed for GEM-listed companies. The Measures further enrich the payment tools for mergers, acquisitions and reorganizations, and reserve institutional space for the issuance of preferred shares, directional issuance of convertible bonds, and directional warrants by listed companies as payment methods for mergers, acquisitions, and reorganizations.

The Measures cancel the threshold restrictions on the issuance of shares to non-related third parties to purchase assets and the mandatory requirements for profit forecast compensation, enrich the tender offer performance guarantee system, reduce the cost of tender offers, while clarifying the separate review system, strengthening in-process and post-event supervision, and urging relevant entities to perform their duties.