China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

The China Securities Regulatory Commission (CSRC) has refuted recent market rumors that an adjustment to the delisting mechanism targets small-cap stocks, noting that it will not have a big impact on the securities market in the short term.

Guo Ruiming, an official with the CSRC, made the remarks on Tuesday when answering media questions about the guideline on strict implementation of delisting regulations released on Friday.

The adjustment of the delisting mechanism is intended to clear out "zombie shell" companies and "black sheep" stocks, and does not target "small-cap stocks," said Guo, adding that proper arrangements for standard making and the transitional period have been made, so there will no big short-term impact.

In 2025, the number of companies on the Shanghai and Shenzhen stock markets to hit the delisting mark is expected to be around 30, said Guo.

"About 100 companies might be warned about delisting but they have one and a half years for rectification, and will only be delisted if they still do not meet the requirements by the end of 2025," Guo noted.

In terms of market value, only four companies facing delisting in the Shanghai and Shenzhen stock exchange markets are worth less than 500 million yuan, and none in Shanghai's tech-heavy STAR Market and the NASDAQ-style ChiNext bourse in Shenzhen are worth under 300 million yuan, said Guo.

The CSRC guideline released on Friday focuses on improving the overall quality of listed companies by clearing out unqualified listed companies from the market.

This is the third guideline document on the capital market from the State Council in two decades. The first two were issued in 2004 and 2014.

Analysts said that the move showed the country's determination to tackle risks and promote high-quality development in the capital market, which will not only help improve investors' expectations in the short term but will also lift China's financial industry globally, creating more opportunities for domestic and foreign investors.

Global Times