The plan to replace proofs of no illegal records with special credit reports among market entities will take effect in Shanghai starting March 1, the municipal government announced at a press conference on Tuesday.

Upon implementation of the plan, Shanghai-based companies only need to log on a designated website and get a copy of automatically generated credit report, which will state that the company has no law violations during the selected time period. The applicable time period starts from Jan 1, 2020 at the earliest.

Prior to this plan, companies might have to apply for no illegal record certificates for more than 10 areas if they had plans for listing, mergers and acquisitions, applying for bank loans, or applying for preferential policies. In addition to applying for such certificates for the parent company, it was also required to present no illegal records for all the branches, subsidiaries and corporate controlling shareholders. Companies often needed to go to different administrative bodies separately, which is time-consuming, labor-intensive and costly.

In July 2022, integrated circuit company Shanghai Sino IC Technology Co Ltd took only 38 days from application to successfully float on the Beijing Stock Exchange, setting a new record in terms of listing speed. This was related to the initiative of replacing administrative compliance certificates with credit reports experimented by the Shanghai Pudong New Area. This attempt has served as an effective exploration of the new policy, according to the municipal government.

The new plan mainly applies to three scenarios. The first is financial scenarios, such as listing application, refinancing, M&A and bond issuance. The second is business operation scenarios including bidding, property rights transactions or government procurement. The third is mainly about administrative management scene, such as applying for preferential policies or financial support.

Starting from July 1, Shanghai will come up with a "compliance code" for market entities with which the company's credit report will be provided under scanning. No paper reports will be needed, said the municipal government on the Tuesday press conference.

shijing@chinadaily.com.cn