The reporter learned from the brokerage office that recently, the China Securities Association solicited comments from the securities industry on “Securities Business Model Practice No. 3 - Sponsor Due Diligence”. The feedback ended on August 25. One of the highlights of the new regulations is the establishment of differentiated inspection standards for the four major listed sectors, while refining full-process practical rules such as acceptance of opinions from third party agencies, financial data verification, and equity penetration verification, filling gaps in special due diligence rules such as new sales models, compacting sponsor agencies' main responsibility for risk control in all aspects, and establishing a strong compliance line for IPO front-end audits. Previously, the 2022 due diligence rules only defined the basic performance boundaries of sponsoring agencies. Overall, they were biased towards macroeconomic framework guidance, and lacked differentiated inspection standards adapted to different market scenarios, enterprise types, and stages of practice. In practical operation, this shortcoming has led to vague industry inspection scales and homogenization of operating standards, and due diligence work has generally fallen into the dilemma of templating and formalization. In response to the above industry pain points, this revision will disassemble, refine, and implement scattered and general guidelines, and establish a refined practice system covering the full cycle of listing guidance, project reporting, and continuous supervision, so that all aspects of sponsorship due diligence work have rules to follow and standards to test.

The reporter learned from the brokerage office that recently, the China Securities Association solicited comments from the securities industry on “Securities Business Model Practice No. 3 - Sponsor Due Diligence”. The feedback ended on August 25. One of the highlights of the new regulations is the establishment of differentiated inspection standards for the four major listed sectors, while refining full-process practical rules such as acceptance of opinions from third party agencies, financial data verification, and equity penetration verification, filling gaps in special due diligence rules such as new sales models, compacting sponsor agencies' main responsibility for risk control in all aspects, and establishing a strong compliance line for IPO front-end audits. Previously, the 2022 due diligence rules only defined the basic performance boundaries of sponsoring agencies. Overall, they were biased towards macroeconomic framework guidance, and lacked differentiated inspection standards adapted to different market scenarios, enterprise types, and stages of practice. In practical operation, this shortcoming has led to vague industry inspection scales and homogenization of operating standards, and due diligence work has generally fallen into the dilemma of templating and formalization. In response to the above industry pain points, this revision will disassemble, refine, and implement scattered and general guidelines, and establish a refined practice system covering the full cycle of listing guidance, project reporting, and continuous supervision, so that all aspects of sponsorship due diligence work have rules to follow and standards to test.