Caofeng: The focus of distribution reform is to protect the rights and interests of small investors

--Comments on the guidance for further reform and improvement of the IPO system (draft) Caofeng China Securities Regulatory Commission on May 22 issued the "on the further reform and improve the new issue system guidance (draft)" ("New issue guidance (draft)"), The reform of the IPO system will be implemented in a phased manner, and the reform measures should be introduced in stages.　　The first stage of the reform will be mainly focused on the introduction of four measures: first, to improve the price of inquiry and purchase of the binding mechanism, the second is to optimize the online distribution mechanism, the network under the Internet to participate in the purchase of the object separately; The third is to set the upper limit on the single purchase account　　Look at this. The reform of the new stock issue promotes the further marketization and standardization of the distribution system, forms a fair, fair and open distribution mechanism, and protects the middle and small investors ' right to participate in the market. The following are some important issues to discuss and suggestions: first, improve the price of inquiry and purchase quotation constraint mechanism, "new issue guidance (draft)" Provisions, the request for inquiry should be really quotes, quotations and purchase quotes should have logical consistency, the main underwriter should take measures to prevent high newspapers do not buy and low prices for shoplifting. The issuer and its principal underwriter shall reasonably set the minimum amount of purchase for each purchase according to the size of the distribution and the market situation.　　Where the final pricing exceeds the expected price resulting in the amount of money raised to exceed the project capital requirements, the issuer should disclose the purpose in advance in the prospectus. This is the issue system further marketization and improve the inquiry system initiatives. This has a very restrictive effect on the transparency of the interests between the listed companies and the main underwriting.　　Conducive to the formation of a reasonable distribution price. Second, the optimization of the online distribution mechanism, "new issue guidance (draft)" Provisions, the network under the online subscription to participate in the object of separation. For each stock issue, any stock placing object can only select a network or online a way to carry out new shares purchase, all participate in the stock net quote, purchase, placing the share of the placing of the object no longer participate in the online purchase.　　This provision for institutional investors, large investors to use capital advantages, network and unlimited online purchase, to seize limited new shares subscription resources is a limitation, may give small and medium-sized investors leave some purchase opportunities and share. Third, the online single purchase account set cap "new issue guidance (draft)" Provisions on the online single purchase account set the ceiling. The issuer and its principal underwriter shall, according to the size of the distribution and the market situation, reasonably set the purchase limit for the single online purchase account, in principle no more than 1 per thousand of the number of the online issue shares. This according to the account and the provisions of the practice of the purchase limit, the original completely according to the amount of funds to purchase the method is undoubtedly a great progress. Because of the full amount of money to purchase, in the case of low rate, small and medium-sized investors basically in the first market to buy stocks. In the case of the Chinese market and the two-tier market, the excess or risk-free return of the primary market is taken by institutional investors or large investors, while small and medium investorsOnly from the two-tier market to buy high-priced stocks, after buying may be quilt. PetroChina's issue and listing is a typical example, the first market price of 16.8 yuan, the two-tier market debut 48 Yuan. Less than 20 days, institutions profit 185.7%. And a lot of retail investors are 48 yuan to buy, bought after the hold-up. This approach, by account and by limiting the number of shares, may offer small investors some opportunities.　　But I think that using the 1 per thousand principle ceiling to absorb the share, or a bit high, for small and medium investors is not very important, because even the small and medium-sized board listed companies with less equity, 1 per thousand of the shares to reach hundreds of thousands of shares, for retail investors may not buy stocks. Iv. to strengthen the risk of IPO subscription "new issue guidance (draft)" to strengthen the new stock subscription risk prompts all participants to clear market risk. The issuer and its principal underwriter shall publish a special bulletin on the investment risks of the new shares to fully disclose the first-tier market risks and remind investors of the feasibility of investing in the company. The Securities operating institution shall take measures to inform the investors of the IPO risk. This is telling investors to pay attention to investment risks.　　If the market is basically a risk-free market in the past, in the future with the distribution system, the distribution of reasonable prices, the one or two-tier market spreads narrowed, there may be a two-tier market below the IPO price. V. Some suggestions I think the reform of the issue system reform focuses on the protection of the interests of small and medium investors, is to give small and medium investors the right to participate in the market, so that small and medium-sized investors can get a reasonable return of the market. From this point of view, the "new issue guidance (draft)" should be further refined and refined. I have the following suggestions: 1, the online purchase all left to small investors. The regulation is suitable for small and medium investors to buy quantity. It is said that in negotiating the draft, the regulatory authorities have considered the purchase limit according to the size of the issue of the number of shares further refinement. If the number of shares issued is not more than 100 million shares, the purchase of a single stock investment account shall not exceed 10,000 shares, the number of shares issued 100 million shares, but less than 400 million shares, the purchase of a single stock investment account shall not exceed 100,000 shares, the number of shares issued 400 million shares, The purchase quantity of a single stock investment account shall not exceed 300,000 shares. I think this provision may be more reasonable and realistic. We can stipulate that this is the on-line purchase condition and the standard. Those who exceed this standard purchase in the net under the purchase.　　This regulation can really give small and medium investors with benefits. 2, all participate in a stock net quote, purchase, placing of the stock placement object no longer participate in online purchase.　　In addition to the network under the directional placement of the stock, all single network under the purchase of the account limit, in principle, not more than 1 per thousand of the number of online issue shares. 3, set the net and online subscription ratio.　　In order to take care of the interests of institutional investors and large investors, you can consider expanding the proportion of the purchase, such as the provisions of the net and online subscription ratio of 6:4. 4, in the two-tier market first day trading in the implementation of the rise and Fall Stop Board system。 Chinese companies on the first day of the IPO premium rate (on the first day of trading prices and price ratio) is generally 100%, such as the first issue of 10 yuan stock trading may be more than 20 yuan, like the previous mentioned PetroChina, the first-level market price of 16.8 yuan, two-class market on the first day 48 yuan A lot of people made the first day trading money. China's stock market and level two market gap is too large (especially the first day of trading), not entirely in the price is unreasonable, it is important that the level two market excessive speculation. Therefore, it is not possible to solve the difference in the one or two-tier market by fully obtaining a reasonable offering price by means of inquiry. I suggest that in the two-tier market, the first day of trading also implement the rise and fall stop system. We now stipulate that plus or minus 10% is the limit for the ups and downs. According to the first-day trading premium rate in developed markets generally does not exceed 15%, we can specify the first day of ups and downs limit to 15% of the issue price. For example, the IPO price of 10 yuan of stock, the first quotation and the opening of the transaction must not reach 11.5 yuan. If it reaches or exceeds 11.5 yuan, there will be no deal. This will prevent the first day of crazy hype. Even if the stock is still up in the future, as a result of the stop-and-go system, so that the stock's rise speed slowed, conducive to directly from the two-tier market to buy shares of investors can buy at a lower price.