(Yicai) April 17 -- The companies that fail to meet the dividend standards and receive a Special Treatment risk warning will not be delisted, according to an official at the China Securities Regulatory Commission.

An ST risk warning is not a *ST delisting risk warning, as it is mainly used to alert investors to pay attention to the risks associated with a company, Guo Ruiming, director general of the Department of Listed Company Supervision of the China Securities Regulatory Commission, said yesterday to clarify new listing rules.

On April 12, the Shanghai Stock Exchange released revised stock listing rules that introduced arrangements for implementing additional ST risk warnings for companies that fail to meet dividend requirements.

If a company is only given the ST risk warning for failing to meet dividend requirements, that does not necessarily lead to delisting, Guo said, adding that once certain conditions are met, the company can apply for the removal of the ST status.

The revised rules mainly aim to enhance the stability and predictability of dividends for listed companies, focusing on those that can cash out dividends but have refrained from doing so or those that have a low dividend payout ratio for a long time, Guo explained.

Only listed companies that failed to meet the cumulative dividend ratio and dividend amount target for three consecutive years will receive the ST risk warning tag, Guo noted. Enterprises with high research and development activity or investment, even if they do not meet dividend requirements, will not be subject to the ST designation.

Based on data from 2020 to 2022, there are only about 80 companies listed on the Chinese mainland stock exchanges that may receive the ST risk warning, Guo pointed out.

On April 12, the CSRC also issued revised policies about the Chinese mainland stock exchange delisting system.

Regarding the new delisting policy, Guo said that it is not specifically targeting small-cap stocks and will not have an immediate impact on the market.

Around 30 stocks on the Shanghai and Shenzhen stock exchanges are expected to get delisted next year, and about 100 of them may receive a delisting risk warning, according to data provided by Guo. The companies will also have over one and a half years to improve their operation before getting delisted.

In terms of market capitalization, only four stocks on the main boards of the Shanghai and Shenzhen bourses have a market capitalization under the delisting threshold of CNY500 million (USD69.1 million), Guo noted. Meanwhile, no stock on the Star Market and ChiNext has a market cap under the CNY300 million delisting threshold.

Editor: Futura Costaglione