Full text of speech by Li Chao of China Securities Regulatory Commission

category:Finance
 Full text of speech by Li Chao of China Securities Regulatory Commission


Good afternoon, everyone! Its a great pleasure to attend this Financial Street Forum. In his opening speech yesterday afternoon, vice premier Liu He made an important exposition on deepening the reform of Chinas financial industry and promoting the high-quality development of the capital market under the new dual cycle development pattern, and put forward clear requirements. Mr. man, chairman of the Securities Regulatory Commission, gave an important opinion on improving the basic system of the capital market. Next, I will talk about the registration system reform and the capital market infrastructure system construction based on the practice of the registration system reform of the science and technology innovation board and the growth enterprise market.

1u3001 The reform of the pilot registration system has achieved positive results

Stock issue system is the most fundamental and basic system in capital market. The Third Plenary Session of the 18th Central Committee of the Communist Party of China clearly put forward the important task of promoting the reform of stock issuance registration system. In November 5, 2018, general secretary Xi Jinping announced the establishment of the Chuang Chuang and the pilot registration system at the opening ceremony of the first China International Import fair, marking the beginning of the registration system reform. Under the strong leadership of the Party Central Committee and the State Council, and with the strong support of all relevant parties, the pilot registration system has been steadily promoted, forming a three-step reform layout from the science and technology innovation board to the growth enterprise market, and then to the whole market. At present, the first two steps of reform have been implemented, the market operation is generally stable, and the reform effect is in line with expectations.

In the first step, the pilot registration system took the lead in achieving breaking the problem in the incremental market segment of the science and technology innovation board. Judging from the situation since the opening of the science and technology innovation board on July 22 last year, the establishment of the science and technology innovation board and the successful implementation of the pilot registration system have played a better role as an experimental field for capital market reform. One is the effective implementation of the registration system with information disclosure as the core. We have firmly grasped the main line of information disclosure, transformed the matters judged by investors in the issuance conditions into more stringent, more comprehensive, in-depth and accurate information disclosure requirements, adhered to the openness and transparency of audit and registration, and established an effective audit and registration mechanism with emphasis on exchange audit and CSRC registration, and gave the right of choice to the market. At present, it takes an average of more than 5 months from the acceptance of application to the completion of registration, and the efficiency of examination and registration is obviously improved. Second, the key institutional innovation has withstood the market test. The establishment of a market-oriented IPO underwriting mechanism makes the pricing of new shares more rational, the pricing efficiency is significantly improved, and the secondary market game is more sufficient. The scientific and technological innovation board has set the investor threshold of 500000 yuan of securities assets + two years of stock investment experience, which has played an important role in guiding rational investment and preventing market risks. The supporting institutional arrangements such as M & A and delisting are also conducive to improving the efficiency of resource allocation and promoting the survival of the fittest. Third, the role of boosting scientific and technological innovation is increasingly apparent. Since the opening of the market, there are more than 180 listed companies on the science and technology innovation board, and the amount of IPO Financing accounts for half of the A shares in the same period, which effectively promotes the gathering of factor resources into the field of scientific and technological innovation. A number of benchmarking scientific and technological innovation enterprises have been listed successively, and the industrial agglomeration and brand demonstration effect have been gradually brought into play.

Second, gem as a stock market pilot registration system started well. The GEM market involves more than 800 stock listed companies and more than 46 million stock investors. The registration system reform fully considers the risk tolerance of stock investors, trading habits and the regulatory practices of stock listed companies, and makes differential arrangements in the system design. Since the implementation of the gem reform on August 24 this year, the concept of registration system has been well implemented, the enterprises under examination have been smoothly translated, the issuance and listing of new shares have been steadily promoted, the overall trading mechanism has been stable, and the arrangement of investors appropriateness has made a smooth transition, and all parties have responded positively. As of October 21, there were 38 listed companies under the gem registration system, with a total market value of more than 700 billion yuan.

In the past two years, the pilot registration system has been smooth and effective. First, a broad consensus on reform has been gradually formed. The new securities law has established the legal status of the registration system of stock issuance. All kinds of market entities actively support and adapt to the registration system reform, and the market vitality is constantly stimulated. Second, the practice of registration system has been recognized. In the reform, we respect the basic connotation of the registration system, draw lessons from international best practices, and design a series of system rules reflecting Chinese characteristics and development stage, which have withstood the test of market practice. Third, the registration system ecosystem is gradually constructed. The supporting rules surrounding the registration system have been constantly improved, the survival of the fittest mechanism has been smoother, the homing and responsibility of various subjects have been significantly enhanced, the legal protection has been more solid, and the concept of market value investment has been increasingly strengthened.

2u3001 On the reform of registration system

The registration system is an important reform and exploration of Chinas capital market. It is a process from putting forward the concept to taking root, which is also the process of deepening our understanding. Combined with the practice of more than one year, I have some thoughts to share with you.

First, it is necessary to do a good job in the collaborative reform between the issuance system and other basic systems. The reform of registration system is not a simple reform of the stock issuance system, but a key reform of the capital market pulling one hair and moving the whole body. At the same time, it is also necessary to reform other basic systems simultaneously. In history, the A-share issuance system has been reformed many times, and beneficial exploration has been made in optimizing the issue pricing, strengthening information disclosure, and strengthening market constraints. This registration system reform is a fundamental reform of the stock issuance system, involving the optimization of a series of basic systems, and simultaneously promoting the key system innovation in underwriting, trading, delisting, investor protection and other links. The reform is more systematic, comprehensive and collaborative than ever before. The reform effect can not only be seen in the link of issuing and listing, but also depends on the implementation effect of other basic systems.

Second, we should dialectically look at the relationship between the supply of new shares and the quality improvement of listed companies under the registration system. For a long time in the past, the market worried that the increased supply of new shares would divert funds from the stock market. From the perspective of this reform, while the efficiency of issuing and listing under the registration system has been significantly improved, the overall quality of listed companies has also been steadily improved. On the one hand, the registration system has brought more sources of fresh water, especially hard technology enterprises, innovation and entrepreneurship enterprises have more listing opportunities, which can largely avoid the problem that high-quality technology enterprises can only choose to list abroad. On the other hand, the entrance of listed companies is well controlled, and the exit channel is unblocked to realize the survival of the fittest. Since the implementation of the reform of the science and technology innovation board and the growth enterprise market, there have been some positive changes, such as more and more breakthroughs and the return of pricing center, which also reflects the markets expectation of this virtuous cycle.

Third, we should balance the reform of financing and optimization of investment. The coordinated development of both sides of investment and financing is an important guarantee for the smooth progress of registration system reform. In the process of pilot registration system, we also strengthened the construction of investment side system and actively guided more medium and long-term funds into the market. For example, we should optimize the registration mechanism of public funds and vigorously develop equity funds; revise and issue QFII and rqfii regulatory rules to introduce more foreign medium and long-term funds; constantly optimize the mechanism of Shanghai Shenzhen Hong Kong stock connect, and promote the proportion of A-shares included in international major indexes, etc. Since 2019, the scale of equity public funds has exceeded 2 trillion yuan, and more and more small and medium-sized investors participate in the capital market through public funds. Shanghai and Shenzhen Stock connect net purchase more than 450 billion yuan, foreign investment in the A-share market continues to increase. With the strong support of relevant ministries and commissions, positive progress has been made in the market for medium and long-term funds such as bank financing and insurance funds.

Fourth, we should promote the equality of rights and responsibilities of all participants in the market. The basic connotation of the registration system is to deal with the relationship between the government and the market, and to clarify the relationship between the responsibilities and rights of the market participants. Under the registration system, the convenience of issuing and listing of enterprises has been significantly improved, and the intermediary agencies have better development opportunities. However, it also requires all market participants to be honest and self disciplined, return to their positions and fulfill their responsibilities. As the first person responsible for information disclosure, the issuer should adhere to the compliance operation, constantly improve the corporate governance, and enhance the consciousness of returning investors and fulfilling the public company obligations. Intermediary institutions should give full play to the role of gatekeepers in the capital market, adhere to professional ethics, and constantly improve the level of professional services. The exchange should hold the plate positioning, control the quality of audit, and continuously optimize the service of enterprises. Only when every link is responsible and fulfilled, can the registration system be both physical and mental.

3u3001 The main considerations of promoting the registration system reform in the next step

Through the pilot projects of the science and technology innovation board and the growth enterprise market, the conditions for implementing the registration system in the whole market have gradually come into being. In the next step, the CSRC will conscientiously implement the decision-making and deployment of the Party Central Committee and the State Council, firmly adhere to the direction of market-oriented and rule of law reform, learn from international best practices, maintain determination, step by step, and handle the registration system reform in a solid and stable manner.

The second is to build a regulatory system conducive to the implementation of the registration system. We should change the concept of supervision and optimize the regulatory mechanism covering all aspects of the market and all kinds of market entities. We should speed up the transformation of regulatory functions, improve the continuous supervision ability of listed companies, strengthen the whole process supervision of intermediary agencies, and increase punishment for violations of laws and regulations. At the same time, we will further promote the streamlining of administration and decentralization, and implement the list of powers and responsibilities system.

The reform of registration system is a systematic project. The running in of system mechanism and the effective check and balance among market entities are a gradual process, which also needs to be adjusted and optimized step by step. It is hoped that all parties in the market will actively make suggestions and suggestions, look at the new situation and new problems objectively and rationally, and jointly promote the reform of registration system and the construction of capital market infrastructure system for a long time.

Finally, I wish this forum a complete success.

Thank you!