“In the next step, the China Securities Regulatory Commission will coordinate development and security, fully support and stabilize the economic market, launch more vigorous and in-depth opening measures, and promote the high-quality development of the capital market.” On September 2, the vice chairman of the China Securities Regulatory Commission Fang Fang Xinghai said at the 2022 China International Finance Annual Forum, including promoting the legislative procedures for new overseas listing regulations, implementing the Sino-US cross-border audit and supervision cooperation agreement, and launching three new measures to expand practical cooperation between the mainland and Hong Kong capital markets.
Help stabilize the economy
Opening-up measures are gradually implemented
Fang Xinghai said that since the beginning of this year, facing the impact of multiple factors, the China Securities Regulatory Commission has continued to make efforts to stabilize expectations, stabilize capital, and stabilize market behavior, and has taken a series of timely and decisive measures. In the first seven months of this year, a total of 178 IPOs were listed on the Shanghai and Shenzhen Stock Exchanges, raising a total of 345.9 billion yuan, both in terms of quantity and amount. ranking first in the world. Refinancing totaled 382.5 billion yuan, maintaining a high level. The CSRC, together with relevant parties, will strengthen the joint supervision of the futures and spot markets, strictly prevent excessive speculation, and effectively prevent and control the risk of continued rise in prices of basic industrial products such as thermal coal and crude oil. It has successfully dealt with the spillover risk of the extreme “short-squeezing” market of nickel futures in the international market on the domestic nickel futures market. The CSI 1000 stock index futures and options were launched, and the trading of the stocks of “specialized, refined, and new” listed companies was activated. The futures market maintained a stable operation, effectively contributing to the overall situation of ensuring supply and stabilizing prices.
“With the joint efforts of many parties, the capital market has withstood the severe test, with active transactions and good functions, which have played an important role in stabilizing the macroeconomic market and social expectations,” Fang Xinghai said.
In addition, the measures to open up the capital market have been gradually implemented, and the opening up to the outside world has been improving. Fang Xinghai said that the CSRC has earnestly implemented the requirements of the CPC Central Committee and the State Council, and the opening of the capital market has made new achievements this year.
The first is to deepen the interconnection of domestic and foreign capital markets and broaden the channels for cross-border investment and financing. Expand the scope of the Shanghai-Shenzhen-Hong Kong Stock Connect and officially launch ETF trading under the Stock Connect. Optimize the Shanghai-Shenzhen-Hong Kong Stock Connect trading calendar and increase the number of trading days. Optimize and expand the interconnection depositary receipt business, expand domestically to Shenzhen Stock Exchange, and overseas to Switzerland and Germany. Five domestic listed companies issued Global Depositary Receipts (GDRs) in Switzerland and the United Kingdom, with a total financing amount of approximately US$2.27 billion. Establish and improve the system for foreign institutional investors to participate in the exchange bond market, and allow foreign institutional investors who have entered the interbank bond market to directly invest in the exchange bond market.
The second is to promote the integration of China’s capital market with international standards, and to improve the market-oriented, legalized and internationalized business and investment environment. China and the United States have successfully signed a cross-border listed company audit and supervision cooperation agreement, taking an important step to clear the obstacles that have existed for many years for Chinese companies to go public in the United States. Drawing lessons from common practices in the international market and combining with the actual situation of the Chinese market, steadily advancing the reform of the delivery versus payment (DVP) reform will help to improve the confidence of international investors in the efficiency of domestic settlement and the security of funds. The Futures and Derivatives Law, which came into effect on August 1 this year, makes clear institutional arrangements to speed up the two-way opening of the futures market.
The third is to do a solid job in the communication and publicity of the opening-up policy to stabilize market confidence and expectations. The CSRC has strengthened communication with international investors, delivered policy information in a timely manner, stabilized foreign investment expectations, and achieved good results. Foreign investment in my country’s capital market has shown obvious resilience.
Steadily promote all-round institutional opening up
Strengthen pragmatic cooperation between the mainland and Hong Kong capital markets
“With the continuous deepening of opening up, the operation quality and international influence of my country’s capital market have also been significantly improved. At present, China’s capital market has grown into the second largest market in the world, and the degree of openness is increasing, attracting more and more international investors to actively participate. Participate.” Fang Xinghai said that in the next step, the China Securities Regulatory Commission will coordinate development and security, fully support and stabilize the economic market, and launch more vigorous and in-depth opening measures to promote the high-quality development of the capital market.
First, we will continue to steadily promote the all-round institutional opening of markets, institutions and products. Promote the legislative procedures for new overseas listing regulations, and make preparations for supporting rules and system construction after the implementation of the reform. Expand and optimize the interconnected depositary receipt business, and support more listed companies in the issuance and listing of interconnected depositary receipts. Further optimize and improve the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism, and promote substantial progress in the interconnection of the exchange bond market. Steadily expand the international varieties of commodities and financial futures, support the authorization and cooperation of the settlement price of futures products, and realize the diversification of the opening-up path of the futures market.
The second is to further strengthen the construction of supervision and risk prevention capabilities in an open environment. Adhere to the requirement of “open, see clearly, and manage”, strengthen the monitoring of cross-border capital flows, and maintain the stable operation of the capital market. Implement the Sino-US cross-border audit supervision cooperation agreement, and build a predictable international regulatory environment for the high-level opening of the capital market. Continue to strengthen communication with foreign institutional investors, continuously improve the convenience of A-share investment, and continuously enhance the confidence of foreign investment in my country’s capital market.
The third is to further strengthen the pragmatic cooperation between the mainland and Hong Kong capital markets. The SFC attaches great importance to the complementary advantages and coordinated development of the capital markets of the two places, promotes the cooperation between the capital markets of the Mainland and Hong Kong to a higher level and a deeper level, and supports Hong Kong in maintaining its status as an international financial center.
“In the next step, the CSRC will launch the following three new measures with the Hong Kong side and relevant departments to expand the practical cooperation between the capital markets of the two places.” Fang Xinghai said that the first is to expand the stock targets of Shanghai-Shenzhen-Hong Kong Stock Connect. Promote the inclusion of eligible stocks of major foreign companies listed in Hong Kong and more companies listed in Shanghai and Shenzhen. The second is to support Hong Kong in launching a RMB stock trading counter. Research on adding RMB stock trading counters in Southbound Stock Connect to help RMB internationalization. The third is to support Hong Kong in launching treasury bond futures. Research and support Hong Kong’s launch of treasury bond futures, accelerate the opening of the domestic treasury bond futures market to the outside world, and realize the coordinated development of the two places.
[Editor in charge: Diao Yunjiao]