An Analysis on Multiple Rounds of Questioning Under the Registration System: Taking Hitake as an Example

Abstract

The traditional approval system has in the past suffered from low approval efficiency and inadequate information disclosure, and was prone to market speculation and information asymmetry. In order to improve market transparency and standardization, the China Securities Regulatory Commission (CSRC) formally implemented a registration system for stock issuance in 2019 and is gradually promoting related reforms. Under the registration system, if the regulator still has questions about a company’s response or needs further information, it may ask additional questions and request more information and explanations from the company. At this point, the company will face multiple rounds of questioning. Through the multiple rounds of questioning procedures, the regulator can gain an in-depth understanding of the situation of the proposed listed company, ask questions and request additional information, so as to better protect the rights and interests of investors and the stable operation of the market. This paper analyzes Hitake as an example of a company, and studies the reasons why Hitake experienced multiple rounds of questioning as well as the economic results of multiple rounds of questioning from both financial and nonfinancial perspectives. The significance of this paper is that by analyzing the multiple rounds of inquiries under the registration system of Hitake, it reflects the impact of the multiple rounds of inquiries, thus reflecting the far-reaching role of the registration system in today’s market as well as the revelation.