According to analysis, Sinolink Securities Co., Ltd. released a research report stating that on July 3, 2026, the China Securities Regulatory Commission (CSRC) solicited public comments on improving the rules for follow-on offerings by listed companies. The core content includes six key aspects, such as introducing a shelf registration system for private placements, raising the upper limit for small-scale rapid financing, and implementing a unified market-price-based issuance pricing mechanism. The firm believes that the new regulations enhance financing efficiency while strengthening market-oriented pricing and regulatory constraints. As reforms in capital market investment and financing continue to deepen, various business lines of securities firms are expected to benefit from the performance increments brought by multi-faceted reforms. The main views of Sinolink Securities are as follows:

Six Core Elements of the CSRC's Public Consultation on Improving Follow-on Offering Rules

(1) Establish a shelf registration system for follow-on private placements.

(2) Optimize the small-scale rapid follow-on financing system. For companies listed on the Shanghai and Shenzhen stock exchanges, the upper limit for small-scale rapid financing is raised from 300 million yuan to 600 million yuan, provided the proposed financing scale does not exceed 20% of net assets. For very large enterprises with net assets exceeding 10 billion yuan, the upper limit is raised to 1 billion yuan. For companies listed on the Beijing Stock Exchange, the upper limit is raised from 100 million yuan to 200 million yuan.

(3) Implement a unified market-price-based issuance pricing mechanism. All listed companies conducting private placements are required to use the first day of the issuance period as the pricing reference date to determine the issue price.

(4) Simplify the conditions for listed companies to conduct private placements to controlling shareholders.

(5) Strengthen regulatory requirements for convertible bonds. It is clarified that convertible bonds on the Shanghai and Shenzhen exchanges are subject to the same interval period requirements for follow-on offerings as private placements, public offerings, and rights issues.

(6) Further clarify regulatory requirements such as the use of raised funds for the company's main business.

Introducing Shelf Registration to Boost Financing Efficiency

For companies that meet the requirements, the validity period for issuance registration decisions is two years. The method of one-time registration and multiple issuances can reduce communication costs and minimize market disruption caused by large-scale financing at once. Raising the upper limit for small-scale rapid follow-on financing and changing the authorization from annual shareholder meetings to shareholder meetings enhances financing flexibility.

Market-Driven Pricing to Protect Minority Investor Interests

Under the old policy, the pricing reference date for the issue price could be the announcement date of the board resolution, the announcement date of the shareholder meeting resolution, or the first day of the issuance period. However, in practice, the interval between dates such as the board resolution announcement date and the actual issuance date could be lengthy, during which the stock price might experience significant fluctuations, leading to insufficient market orientation in pricing. Under the new policy, market-price-based issuance can effectively reduce situations where the stock price rises significantly but subscribers purchase at low prices, preventing the dilution of minority shareholder interests and market speculation.

Supporting Private Placements by Controlling Shareholders While Strengthening Constraints and Supervision

Lowering the threshold for follow-on offerings by controlling shareholders and extending the lock-up period from 18 months to 36 months serves as a constraint. Convertible bonds on the Shanghai and Shenzhen exchanges are subject to the same interval period requirements for follow-on offerings as private placements, public offerings, and rights issues. Additionally, requirements related to debt-servicing capacity constraints for issuing convertible bonds are strengthened, which may exclude companies with high debt ratios and weak cash flow.

Investment Implications

As reforms in capital market investment and financing continue to deepen, the various business lines of securities firms are expected to benefit from the performance increments brought by multi-faceted reforms.

Risk Factors

Macroeconomic slowdown; significant downturn in the equity market; capital market reforms falling short of expectations.