Original Title: Implementation Opinions of the Municipal Government on Further Improving the Quality of Listed Companies and Promoting the Healthy Development of the Capital Market

To the People’s Governments of All Districts, All Municipal Commissions, Offices, and Bureaus, and All Units Directly Under the Municipal Government:

To implement the “Opinions of the State Council on Further Improving the Quality of Listed Companies” (State Council Document [2020] No. 14) and the “Implementation Opinions of the Provincial Government on Further Improving the Quality of Listed Companies” (Jiangsu Provincial Government Document [2020] No. 102), promote the high-quality development of listed companies in Nanjing, build a group of high-quality listed companies, and support the construction of an “Innovation City,” the following opinions are hereby put forward.

I. General Requirements

Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will fully implement the spirit of the 19th National Congress of the Communist Party of China and the Second, Third, Fourth, and Fifth Plenary Sessions of the 19th Central Committee. We will adhere to supply-side structural reform as the main thread, maintain a problem-oriented, service-oriented, and goal-oriented approach, continuously optimize the business environment, resolve issues faced by listed companies, effectively mitigate risks, promote standardized development, enhance overall quality, leverage the positive role of listed companies in building a city of innovation, and provide strong support for Nanjing’s high-quality development.

II. Vigorously Cultivating High-Quality Listed Companies

(1) Establish and Improve the Database of Prospective Listed Companies. Develop an enterprise cultivation information system, fully utilize information technology for screening, and combine recommendations submitted by various districts, municipal departments, and market institutions to establish and improve the city-wide database of prospective listed companies.Accelerate the inclusion of Nanjing’s innovative leading enterprises, unicorns, gazelle enterprises, “Little Giants” (specialized, refined, distinctive, and innovative enterprises), high-tech enterprises, key enterprises in the eight major industrial chains, new research institutions and incubated enterprises, and enterprises invested in by government-guided funds into the database. Give priority to high-quality enterprises that align with national strategies, have achieved breakthroughs in key core technologies, and enjoy high market recognition, thereby forming a reserve of resources categorized by industry, sector, and tier.Implement dynamic management and monthly updates for enterprises in the database, provide categorized guidance and focus on key breakthroughs, and offer full-process services. (Responsibility: Municipal Bureau of Local Financial Supervision, Municipal State-owned Assets Supervision and Administration Commission, Municipal Development and Reform Commission, Municipal Science and Technology Bureau, Municipal Industry and Information Technology Bureau, Municipal Market Regulation Bureau, Municipal Taxation Bureau, Jiangbei New Area Administrative Committee, People’s Governments of all districts, Nanjing Economic and Technological Development Zone, and Jiangning Economic and Technological Development Zone)

(2) Actively Promote the Listing of High-Quality Enterprises. Deepen the implementation of the “Ninghang Action” plan to promote enterprise listings, guiding enterprises to accelerate the process of shareholding restructuring while ensuring standardized operations. Optimize workflows and streamline procedures; relevant departments shall expedite the processing of approvals, filings, and certifications related to land, real estate, taxation, social security, state-owned assets, market regulation, and environmental protection during the enterprise listing process in accordance with laws and regulations.Regarding historical legacy issues arising during enterprise restructuring and listing, relevant departments shall strengthen policy guidance and services. Adhering to the principles of respecting history and resolving issues, they shall coordinate with higher-level departments to resolve such matters in a timely and appropriate manner in accordance with the law. Actively introduce and establish the Nanjing Branch of the Capital Market Academy, and strengthen and consolidate the STAR Market Enterprise Incubation Center (Nanjing), the Nanjing Capital Market Academy, and the Nanjing Science and Technology Finance Roadshow Center to provide listed enterprises and prospective listed enterprises with professional and comprehensive training, exchange, roadshow, and financing platforms.(Responsibility: Municipal Bureau of Local Financial Supervision and other relevant municipal departments; Jiangbei New Area Administrative Committee; district people’s governments; Nanjing Economic and Technological Development Zone; Jiangning Economic and Technological Development Zone)

(3) Regulate the introduction of listed companies through multiple channels. Support eligible listed companies in conducting initial public offerings (IPOs) on domestic securities markets by spinning off certain businesses or assets into subsidiaries under their direct or indirect control. Support eligible overseas-listed companies in listing domestically following privatization. Improve procedures for the introduction and relocation of listed companies, and establish a multi-departmental information-sharing and pre-consultation mechanism. Prudently and appropriately regulate the introduction of listed companies, and support local enterprises in acquiring stakes in high-quality listed companies and relocating their headquarters to Nanjing.(Responsibility: Municipal Bureau of Local Financial Supervision, Municipal State-owned Assets Supervision and Administration Commission, Municipal Market Regulation Bureau, Municipal Commerce Bureau, Municipal Investment Promotion Bureau; Jiangbei New Area Administrative Committee, People’s Governments of all districts, Nanjing Economic and Technological Development Zone, and Jiangning Economic and Technological Development Zone)

III. Guiding the Standardized Development of Listed Companies

(4) Enhance the Governance Standards of Listed Companies. Urge listed companies, shareholders, and relevant parties obligated to disclose information to disclose information truthfully, accurately, completely, timely, and fairly in accordance with information disclosure rules. Strictly enforce corporate accounting standards and regulations set by regulatory authorities to improve the quality of financial information disclosure. Strengthen guidance and education regarding the conduct of directors, supervisors, and senior management of listed companies, as well as that of controlling shareholders and actual controllers. Fully leverage the roles of independent directors and the board of supervisors to enhance the governance standards of listed companies.Encourage listed companies to improve communication mechanisms between their boards of directors and investors, and to establish sound channels for institutional investors to participate in corporate governance. Introduce directors’ and officers’ liability insurance in accordance with market principles to enhance the risk-resilience of listed companies. Guide listed companies to improve their internal control systems in accordance with the requirements of the China Securities Regulatory Commission (CSRC) and stock exchanges, thereby enhancing the effectiveness of these systems.Strongly support eligible state-controlled listed companies in establishing and improving professional manager systems, and explore the implementation of equity incentive plans and employee stock ownership plans for such companies. Improve the state-owned asset supervision system with a focus on capital management, and promote the sound governance mechanisms of state-owned listed companies. (Responsibility: Municipal Local Financial Regulatory Bureau, Municipal State-owned Assets Supervision and Administration Commission, Municipal Finance Bureau, Municipal Justice Bureau, Jiangbei New Area Administrative Committee, district people’s governments, Nanjing Economic and Technological Development Zone, and Jiangning Economic and Technological Development Zone)

(5) Strengthen penalties for violations. Actively cooperate with regulatory authorities and stock exchanges in investigating and addressing illegal and non-compliant activities. Conduct joint law enforcement operations by relevant departments at appropriate times, intervene early, and effectively enhance collaborative efforts to jointly manage and oversee these matters, thereby effectively mitigating risks in listed companies and promoting their standardized development. Establish and improve credit records for listed companies, their shareholders, market institutions, and personnel; include illegal and dishonest acts in the capital market within these credit records; regularly report and share such information; and implement joint disciplinary measures in accordance with laws and regulations.(Responsibility lies with the Municipal Development and Reform Commission, the Municipal Public Security Bureau, and other relevant municipal departments; the Jiangbei New Area Administrative Committee; district people’s governments; the Nanjing Economic and Technological Development Zone; and the Jiangning Economic and Technological Development Zone)

IV. Promoting the Optimization and Strengthening of Listed Companies

(6) Support refinancing by listed companies. Support listed companies in raising capital through methods such as rights issues, share placements, convertible bonds, and corporate bonds to increase the proportion of direct financing. Relevant departments shall proactively coordinate and expedite procedures—including project approval, environmental impact assessments, and land use—for investment projects funded by listed companies’ refinancing.Listed companies are encouraged to introduce social capital based on actual business needs to enhance the stability of long-term capital. Financial institutions are encouraged to develop and customize diversified financing products to support the financing needs of listed companies, their major shareholders, and management. Financing guarantee institutions are encouraged to provide guarantees for the financing projects of listed companies. (Responsibility lies with the Municipal Bureau of Local Financial Supervision and other relevant municipal departments, the Jiangbei New Area Administrative Committee, the people’s governments of each district, the Nanjing Economic and Technological Development Zone, and the Jiangning Economic and Technological Development Zone)

(7) Promote Market-Oriented Mergers and Acquisitions (M&A). Adhere to the principle of combining core businesses with innovative operations. Encourage listed companies to focus on their core businesses, leverage the characteristics of local industrial clusters, and conduct M&A activities targeting weak and critical links in industrial chains. Strictly guard against situations involving “high valuations, high commitments, and high goodwill” in M&A transactions, and curb blind cross-sector restructuring and “deceptive” reorganizations.Guide commercial banks to actively and prudently conduct merger and acquisition lending business under the premise of controllable risks. Encourage various types of capital to participate in the mergers and acquisitions of listed companies through multiple channels. Encourage capable enterprises to engage in cross-border mergers and acquisitions to optimize resource allocation on a global scale. Promote the securitization of state-owned enterprise assets and encourage the revitalization of existing assets through means such as the issuance of publicly offered REITs. Leverage the role of securities market prices, valuations, and asset appraisal results in the pricing of state-owned asset transactions, and support state-owned enterprises in carrying out mixed-ownership reforms by leveraging the capital market.(Responsibility lies with relevant municipal departments including the Municipal Local Financial Regulatory Bureau, the Municipal Development and Reform Commission, and the Municipal State-owned Assets Supervision and Administration Commission, as well as the Jiangbei New Area Administrative Committee, district people’s governments, the Nanjing Economic and Technological Development Zone, and the Jiangning Economic and Technological Development Zone)

(8) Foster a favorable development environment for listed companies. Support listed companies in pursuing collaborative development with high-quality enterprises upstream and downstream in the industrial chain through investment, mergers and acquisitions, order placement, and business exchanges. Support listed companies in issuing shares to acquire high-quality overseas assets that comply with national policies. Establish and improve a collaborative intellectual property protection mechanism for listed companies. Support listed companies in properly implementing equity incentive plans and employee stock ownership plans; implement relevant tax preferential policies for equity incentives, appropriately extend the personal income tax payment period in accordance with regulations, and reduce the costs of equity incentives.Urge listed companies to earnestly fulfill their social responsibilities, leverage their positive role in driving employment, technological innovation, and ecological and environmental protection, and continuously enhance their core competitiveness, resource integration capabilities, and overall influence. (Responsibility lies with the Municipal Bureau of Local Financial Supervision, the Municipal Taxation Bureau, and other relevant municipal departments; the Jiangbei New Area Administrative Committee; district people’s governments; the Nanjing Economic and Technological Development Zone; and the Jiangning Economic and Technological Development Zone)

V. Properly Addressing Risks in Listed Companies

(9) Prudently resolve stock pledge risks. Strengthen risk prevention and control regarding stock pledges by listed companies, and regularly track and analyze risks associated with companies with high pledge ratios. Further leverage the role of state-owned asset mixed-ownership reform funds and private enterprise relief and development funds, and flexibly employ methods such as equity transfers, private placements, debt transfers, and debt-to-equity swaps to resolve and alleviate stock pledge risks of listed companies.Support districts and development zones in establishing relief funds to resolve stock pledge risks of listed companies within their jurisdictions. Implement the financing consultation and assistance mechanism for private enterprises, guiding financial institutions to provide necessary financing support to listed companies and their controlling shareholders that have sound operational fundamentals, growth potential, but are facing temporary liquidity issues. Urge financial institutions to standardize their participation in listed company stock pledge businesses. Support various types of capital in participating in market-oriented debt-to-equity swaps in accordance with laws and regulations, and improve the coordinated mechanism for risk resolution.(Responsibility lies with the Jiangbei New Area Administrative Committee, the people’s governments of all districts, the Nanjing Economic and Technological Development Zone, and the Jiangning Economic and Technological Development Zone; the Municipal Bureau of Local Financial Supervision, the Municipal State-owned Assets Supervision and Administration Commission, the Municipal Finance Bureau, the Operations Management Department of the People’s Bank of China Nanjing Branch, and Zijin Investment Group)

(10) Strictly address issues of misappropriation of funds and unauthorized guarantees. Guide listed companies, controlling shareholders, and actual controllers to enhance their awareness of compliance and prohibit them from infringing upon the interests of listed companies in any manner. Hold listed companies, controlling shareholders, and actual controllers strictly accountable for their primary responsibilities. For existing issues of misappropriation of funds and unauthorized guarantees, guide listed companies, controlling shareholders, and actual controllers to formulate practical and feasible plans, setting clear deadlines for repayment or resolution.When a listed company undergoes bankruptcy reorganization, it shall propose a specific plan to resolve issues of misappropriation of funds and unauthorized guarantees to safeguard the legitimate rights and interests of the listed company and its investors. For cases where rectification is not completed within the specified timeframe, or where newly occurring misappropriation of funds or unauthorized guarantees constitute a criminal offense, criminal liability shall be pursued in accordance with the law. Prevent the occurrence of new instances of misappropriation of funds and unauthorized guarantees. Encourage controlling shareholders of listed companies to participate in blockchain pilot programs in regional equity markets, with relevant information managed on the blockchain.(Responsibility lies with the Jiangbei New Area Administrative Committee, the people’s governments of all districts, the Nanjing Economic and Technological Development Zone, and the Jiangning Economic and Technological Development Zone; the Municipal Bureau of Local Financial Supervision, the Municipal Court, the Municipal Procuratorate, and the Municipal Public Security Bureau are also responsible)

(11) Prudently Mitigate Risks of Listed Companies. Local districts and development zones must earnestly assume responsibility for the risk resolution of listed companies. In collaboration with securities regulatory authorities, they shall strengthen risk screening of listed companies, implement dynamic management of risk lists, improve risk monitoring and early warning mechanisms, and fulfill risk mitigation tasks. Relevant work shall be incorporated into routine financial risk prevention and resolution efforts.Close attention shall be paid to listed companies facing issues such as sustained declines in performance, substantial losses, poor operating cash flow, unstable financial conditions, high ratios of goodwill to net assets, and pressure regarding bond redemption and repurchase. These companies shall be urged to work with market institutions to formulate risk resolution plans and gradually resolve risks. Investor protection and education shall be strengthened; investors shall be encouraged to exercise their shareholder rights in accordance with the law; investor risk awareness shall be cultivated; and all types of investors shall be actively guided to invest rationally and protect their rights and interests in a reasonable and lawful manner.(Responsibility lies with the Jiangbei New Area Administrative Committee, the people’s governments of all districts, the Nanjing Economic and Technological Development Zone, and the Jiangning Economic and Technological Development Zone; the Municipal Bureau of Local Financial Supervision and the Municipal State-owned Assets Supervision and Administration Commission are responsible)

(12) Facilitate exit channels for listed companies. Strictly implement relevant provisions of the delisting system and support listed companies in exiting the market in accordance with laws and regulations through channels such as voluntary delisting, mergers and acquisitions, and bankruptcy reorganization. Actively cooperate with securities regulatory authorities to promptly remove from the market companies that lack the ability to continue operations or have seriously violated laws and regulations, thereby disrupting market order. Establish and improve risk management mechanisms for the delisting of listed companies, leverage the roles of courts, industry associations, and law firms, and strengthen legal guidance during the bankruptcy reorganization process of listed companies.(Responsibility: Municipal Court, Municipal Bureau of Justice, Municipal Bureau of Local Financial Supervision, Municipal Market Regulation Bureau; Jiangbei New Area Administrative Committee, People’s Governments of all districts, Nanjing Economic and Technological Development Zone, Jiangning Economic and Technological Development Zone)

(13) Strengthen Response to Major Emergencies. In the event of major emergencies such as natural disasters or public health crises that severely impact the normal production and operations of listed companies, the relevant districts and development zones shall promptly report the situation. Relevant departments shall enhance collaboration and coordination, actively coordinate the implementation of support policies in areas such as industry, finance, and taxation, and promptly take measures to maintain the supply of labor, production materials, public utilities, and logistics channels, thereby supporting listed companies in resuming normal production and operations as soon as possible.(Responsibility lies with the Jiangbei New Area Administrative Committee, the people’s governments of all districts, the Nanjing Economic and Technological Development Zone, and the Jiangning Economic and Technological Development Zone; relevant municipal departments are also responsible)

VI. Fostering Synergy to Enhance the Quality of Listed Companies

(14) Optimize organizational support mechanisms. Leverage the city-wide joint conference mechanism for promoting enterprise listings to coordinate all tasks related to enterprise listings, refinancing, and mergers and acquisitions. Relevant departments shall collaborate to carry out the cultivation, management, and risk resolution of listed companies. Relying on the Jiangsu Association of Listed Companies and the Jiangsu Securities Association, strengthen self-regulation of listed companies and intermediary institutions. Explore the establishment of demonstration zones for the high-quality development of listed companies.(Responsibility lies with the Municipal Bureau of Local Financial Supervision and other relevant municipal departments, the Jiangbei New Area Administrative Committee, the people’s governments of all districts, the Nanjing Economic and Technological Development Zone, and the Jiangning Economic and Technological Development Zone)

(15) Urge intermediary institutions to fulfill their duties.Relevant industry regulatory authorities shall strengthen oversight of the professional conduct of intermediary institutions—including underwriters, auditors, appraisers, credit rating agencies, and legal service providers—and guide these institutions to improve the quality of their services. Relevant departments and institutions shall cooperate with intermediary institutions to ensure they perform their duties in accordance with laws and regulations, providing relevant information in a timely, accurate, and complete manner. The supervisory and guiding roles of intermediary institutions and industry associations shall be leveraged to establish professional practice records for intermediary institutions and guide them to act with due diligence. (Responsibility: Relevant municipal departments)

(16) Foster a healthy public opinion environment. Fully leverage the role of news media in guiding public opinion and exercising oversight to jointly create a favorable public opinion environment for the capital market. Regulate reporting and commentary by various entities regarding listed companies with which they have interests, prevent conflicts of interest, intensify efforts to combat the fabrication and dissemination of false or misleading information, and standardize the order of information dissemination.Strengthen the sense of social responsibility among listed companies, their directors, supervisors, and senior management, as well as their actual controllers; promote the entrepreneurial spirit; resolutely prevent moral hazards; and advocate the concept of integrity in business operations. (Responsibility lies with the Municipal Publicity Department, the Municipal Cyberspace Administration Office, the Municipal Public Security Bureau, the Jiangbei New Area Administrative Committee, the people’s governments of all districts, the Nanjing Economic and Technological Development Zone, and the Jiangning Economic and Technological Development Zone)