Director of the Shanghai Stock Exchange Capital Market Research Institute: Bitcoin mining business is not suitable for listing

At the 2019 "Lujiazui Capital Night Talk" Summit Forum, Shi Donghui, director of the Shanghai Stock Exchange's Capital Market Research Institute, said that the registration system still needs to be reviewed, and it depends on whether the company's business is consistent with traditional social ethics. "For example, a company that extracts bile from live bears may still not be able to go public; for example, when Bitcoin was hot, everyone was mining, but the Hong Kong Stock Exchange believed that this kind of business was not suitable for listing."

"Under the registration system, the market plays a greater and more important role, and intermediaries also play a more important role."

Shi Donghui summarized the key points of the Sci-Tech Innovation Board market design into three parts:

The first is the inclusiveness of the market, that is, to design the listing standards of the capital market to be more inclusive. Because science and technology enterprises involve different industries and are at different stages of development, their operating risks, equity structures, and financial characteristics have their own characteristics. The idea is to set some inclusive listing standards on the premise that the company is basically compliant and the basic information disclosure conditions meet the basic standards, such as the company's cash flow, revenue, profit, R&D investment, including the expected market value after listing, and combine these different conditions. "You can choose another one, there is always one that suits you. If there is no one that suits you, you can go back and continue practicing."

The second is the effectiveness of pricing, which mainly involves designing some self-balancing trading systems and strengthening the responsibilities of intermediaries. Intermediaries are not just about sponsoring companies for listing. Intermediaries should play a greater role in the development, listing, and continued operation of companies after listing to ensure the effectiveness of their pricing.

The third is investor protection. Under China's special national conditions, the Science and Technology Innovation Board will set up investor thresholds, mainly based on the investment period, risk tolerance, and whether the account assets have reached a certain scale. At the same time, there are strict delisting conditions. For example, if a listed company violates discipline or regulations, or discloses major false information, it will be delisted; if the business of the company deteriorates and the original listing standards are not met, it will also be delisted.

Another major issue closely related to the Science and Technology Innovation Board is the registration system for issuance. How to understand the registration system? Shi Donghui believes that whether it is a registration system or an approval system, it is nothing more than the difference in the role or role played by the government and the market.

"The registration system does not mean that there will be no review. It still needs to be reviewed. It depends on whether the business of the company is consistent with the traditional ethics of society." Shi Donghui gave an example, "For example, a company that extracts bile from live bears may still not be able to go public; for example, when Bitcoin was hot, everyone was mining, but the Hong Kong Stock Exchange believed that this kind of business was not suitable for listing."

Shi Donghui said that the difference between the registration system and the approval system lies first in the concept of audit. Regardless of the previous audit system or the approval system, it subconsciously implies such an assumption: to be responsible for the investment of the enterprise, so various conditions are stipulated. But under the registration system, it only needs to judge the authenticity, completeness and accuracy of the company's information.

Another difference is the way of review. The registration system will make all the standard procedures for listing public. After the company submits the application documents online, it does not need to come to the exchange except for the required meeting. All procedures are carried out online electronically. The exchange will make the company's information disclosure meet the "three characteristics" requirements through continuous inquiries, and then all questions and feedback will be made public online, allowing investors to make judgments or ask questions.

Finally, regarding the issue of how to issue shares, Shi Donghui believes that the market-oriented reform of issuance must be promoted in terms of price, scale and time of issuance.