Upgraded IPO regulation! Reconstructing sponsor due diligence rules to strictly rectify pseudo-innovation and formalistic due diligence.

Recently, the China Securities Association solicited opinions from the securities industry on "Securities Business Demonstration Practice No. 3 Sponsor Due Diligence," with feedback due by August 25. One of the highlights of the new regulations is the establishment of differentiated verification standards for the four major listing boards. It also refines the operational details for the entire process of third-party opinion acceptance, financial data verification, and equity penetration checks, filling the gap in special due diligence rules related to new sales models. This aims to thoroughly enforce the risk control responsibilities of sponsoring institutions and to strengthen compliance for pre-IPO reviews. The previous due diligence rules from 2022 only defined the basic boundaries of responsibilities for sponsoring institutions and were largely macro-framework oriented, lacking differentiated verification standards suitable for different market scenarios, company types, and stages of practice. In practical operations, this shortcoming led to vague verification standards and homogenized operational criteria, causing due diligence work to generally fall into a template-driven and formalistic predicament. To address these industry pain points, this revision breaks down the scattered and vague criteria into detailed and concrete guidelines, establishing an intricate practice system that covers the entire cycle of listing guidance, project declaration, and continuous oversight, ensuring that all aspects of sponsor due diligence have specific rules to follow and standards to meet.