CCTV News:On July 24th, Politburo meeting of the Chinese Communist Party made important arrangements for capital market work, and clearly stated that "the capital market should be activated to boost investor confidence". Recently, the relevant person in charge of the CSRC accepted an interview with the media on the implementation.
1. What consideration does the CSRC have for the implementation of this decision? What policy measures will be taken next?
A: This time, Politburo meeting of the Chinese Communist Party emphasized "to enliven the capital market and boost investors’ confidence", which is the new deployment and new requirements of the CPC Central Committee for capital market work, and fully reflects the great attention and ardent expectations of the CPC Central Committee for the capital market, and the important significance of stabilizing capital market expectations for maintaining overall economic and social stability. The CSRC thoroughly studied and implemented the spirit of Politburo meeting of the Chinese Communist Party, conscientiously implemented the arrangements of the the State Council executive meeting and the the State Council plenary meeting, set up a special working group, formulated a work plan on the basis of brainstorming, and determined a package of policies and measures to invigorate the capital market and boost investors’ confidence.
The general idea is to take Socialism with Chinese characteristics Thought of the Supreme Leader in the new era as the guide, adhere to the general tone of striving for progress while maintaining stability, adhere to the system concept, adhere to the problem orientation, adhere to the direction of marketization and rule of law, focus on the main line of building a modern capital market with China characteristics, make comprehensive policies and make concerted efforts to give full play to the functions of resource allocation, price discovery and risk management, continuously optimize the market ecology, effectively enhance the market vitality, efficiency and attractiveness, and maintain a stable and good development trend of the capital market.
Grasp several principles in the work: First, treat both the symptoms and the root causes. Based on the present situation, we will speed up the launch of a number of practical and effective policy measures to stabilize expectations and boost confidence, and focus on the long-term, adhere to reform and open the way, make overall plans for the development of the stock, bond and futures markets, and improve the basic system of the capital market. The second is to highlight key points. Emancipate the mind, identify the starting point, and strive to make breakthroughs in introducing flowing water from the source, reducing transaction costs, and improving transaction smoothness. The third is to stabilize the word. Grasp the relationship between stability and vitality, coordinate the work of living the market, stabilizing expectations and keeping the bottom line, and insist on improving market activity on the premise of maintaining overall market stability. The fourth is to exert synergy. Strengthen cross-ministerial communication and policy coordination, and work in the same direction to form a strong synergy to activate the market and boost confidence. The main measures include the following aspects:
First, accelerate the reform of the investment side and vigorously develop equity funds. Accelerate the formulation of the action plan for the reform of the investment side of the capital market, and make systematic arrangements from the aspects of promoting the high-quality development of Public Offering of Fund industries, continuously optimizing the market investment ecology, and increasing the introduction of medium and long-term funds. Vigorously developing equity funds is an important part of the investment-side reform. The key measures include: First, relaxing the registration conditions of index funds, improving the development efficiency of index funds, and encouraging fund managers to increase product innovation. The second is to promote the comprehensive implementation of Public Offering of Fund’s rate reform and lower the management rate level. The third is to guide Head Public Offering of Fund Company to increase the issuance ratio of equity funds, so as to promote the total amount of Public Offering of Fund and optimize its structure. The fourth is to guide Public Offering of Fund managers to increase their efforts to purchase their own equity funds. Fifth, establish the incentive and restraint mechanism of "counter-cyclical layout" of managers in Public Offering of Fund to reduce pro-cyclical resonance. Sixth, broaden the investment scope and strategy of Public Offering of Fund, and relax the investment restrictions on Public Offering of Fund’s investment in stock index options, stock index futures, treasury bonds futures and other varieties.
The formula of the spirit Lord ascended the skyPractical measures will also be introduced in cases and further promoting the normal issuance of REITs.
Third, optimize and improve the trading mechanism to enhance the convenience of trading. At present, it has been announced to reduce the proportion of settlement reserve, reduce the number of stock funds to declare, study the introduction of ETF into the after-hours fixed-price trading mechanism, and introduce the inquiry transfer and placement reduction system of GEM. The next step will be to introduce the following measures: first, reduce the handling fee of securities transactions and simultaneously reduce the commission rate of securities companies. The second is to further expand the scope of margin financing and securities lending targets, reduce the margin financing and securities lending rates, and include ETFs in the refinancing targets. The third is to improve the share reduction system, strengthen the supervision of illegal reduction and "detour" reduction, and severely punish illegal reduction. The fourth is to optimize transaction supervision, enhance transaction convenience and smoothness, and enhance the transparency of transaction supervision. Timely launch a programmed transaction reporting system. Fifth, study the appropriate extension of the trading hours in the A-share market and the exchange bond market to better meet the needs of investment transactions.
Fourth, stimulate the vitality of market institutions and promote the high-quality development of the industry. First, adhere to the direction of intensive, differentiated, functional and international development, and build high-quality investment banks. Optimize the calculation standards of risk control indicators of securities companies, appropriately relax the capital constraints on high-quality securities companies, and improve the efficiency of capital use. The second is to implement counter-cyclical adjustment of margin financing and securities lending, and study the appropriate reduction of margin ratio of on-site financing business under the premise of overall controllable leverage risk. Third, research and launch a series of financial futures options such as SZSE 100 stock index futures options and CSI 1000ETF options to better meet the risk management needs of investors. Allow more domestic and foreign investment institutions to use derivatives to manage risks under the premise of prudence. The fourth is to implement differentiated regulatory policies, simplify the registration and filing of high-quality private equity venture capital funds, and further promote the pilot of physical distribution of shares by private equity venture capital funds. Fifth, vigorously develop China’s characteristic index system and indexed investment, and encourage all kinds of funds to enter the market through indexed investment.
5. Support the development of the Hong Kong market and make overall plans to enhance the activity of A shares and Hong Kong stocks. At present, it has been announced to introduce a block trading mechanism in Shanghai-Shenzhen-Hong Kong Stock Connect. In the next step, practical measures will be further introduced to stimulate the vitality of the Hong Kong market and promote the coordinated development of the mainland and Hong Kong markets. First, continue to optimize the interconnection mechanism, further expand the scope of interconnection targets, and add RMB stock trading counters in Hong Kong Stock Connect. The second is to launch treasury bonds futures and related A-share index options in Hong Kong. The third is to support the dual listing of stocks listed in the United States in Hong Kong.
Sixth, strengthen inter-ministerial coordination and form an active capital market synergy. Activating the capital market and boosting investors’ confidence is a systematic project, involving all aspects of work, which requires a set of "combination boxing" to form a joint policy force. Especially in the medium and long-term capital market, capital market tax policy, etc., it needs the coordinated support of relevant ministries and commissions. Recently, we have increased inter-ministerial communication and coordination, and made great efforts to study and promote some important measures. For example, promote the optimization of listed companies’ equity incentive personal income tax payment time and other capital market-related tax arrangements; Promote the establishment and improvement of a long-term assessment mechanism for equity investment such as insurance funds, and promote its efforts to increase equity investment; Guide and support bank wealth management funds to actively enter the market; Support more investors such as banking institutions to fully participate in the exchange bond market, and so on.
What needs to be emphasized is that activating the capital market, boosting investors’ confidence, and striving for progress while maintaining stability are complementary and internally unified. Without a relatively stable market environment, it is impossible to activate the market and boost confidence. We will do a good job in activating the market, preventing risks and strengthening supervision. We will work with relevant parties to prevent and handle risks in key areas such as urban investment bonds and real estate, resolutely maintain the stable operation of the market, stick to the main business of supervision, increase the intensity of anti-counterfeiting and counterfeiting in the capital market, and severely and promptly investigate and deal with typical illegal cases such as fraudulent issuance, financial fraud, market manipulation and insider trading, so as to provide investors with real and transparent listed companies and consolidate long-term investment confidence.
2. Incremental capital inflow is the key to active market. What are the considerations and specific measures for introducing more medium and long-term funds?
A: In recent years, social security funds, insurance funds, annuity funds and other medium-and long-term funds have adhered to market-oriented and professional operations, maintaining a net inflow as a whole, and achieving a benign interaction with the capital market while maintaining and increasing value. But overall, the shortage of medium and long-term funds is still a prominent problem that restricts the healthy development of the capital market. At present, the proportion of medium and long-term capital holding shares is less than 6%, far below the level of more than 20% in mature overseas markets. With the strong support of relevant parties, we are studying and formulating a reform plan for the investment side of the capital market. In introducing more medium and long-term funds, the key point is to create a policy environment conducive to medium and long-term funds entering the market. Specific measures: First, support the national social security fund, basic endowment insurance fund and annuity fund to expand the investment scope of the capital market; Second, study and improve the rules for identifying strategic investors, and support medium and long-term funds such as the National Social Security Fund to participate in the non-public offering of listed companies; The third is to formulate rules for institutional investors to participate in the governance of listed companies and give play to the binding role of professional buyers; The fourth is to optimize the supervision of investment transactions, study and optimize the application of laws and regulations such as large shareholding information disclosure, short-term trading, and reduction restrictions to facilitate the investment operation management of professional institutions; Fifth, enrich the financial derivative investment tools inside and outside the market, optimize the restrictions on the use of derivatives by various institutional investors, and improve the efficiency of risk management; Sixth, enrich the personal pension product system, and include equity products such as index funds into the scope of investment choices.
At the same time, we will strengthen cross-ministerial communication and coordination, increase the introduction of various medium and long-term funds, and increase the proportion of equity investment. Including: promoting the improvement of the investment management system of the national social security fund and the basic old-age insurance fund, and further promoting the market-oriented investment operation level of the annuity fund; Promote research and optimization of accounting treatment of equity investment of insurance funds, promote the pilot project of long-term stock investment of insurance funds, and gradually expand the scope and scale of the pilot project; Promote the accelerated expansion of the personal pension system to the whole country and expand the coverage of the system; Support bank wealth management funds to improve the ability of equity investment; Actively promote all kinds of medium and long-term funds to establish long-term investment performance orientation, comprehensively establish a long-term assessment mechanism for more than three years, and enhance the stability of investment behavior.
3. At the 14th Lujiazui Forum, President Yi Huiman said that policies and measures to further support the self-reliance and self-reliance of high-level science and technology in the capital market will be introduced in due course. What is the progress in this regard and what specific measures are there?
A: Since the beginning of this year, on the basis of in-depth research and extensive listening to opinions and suggestions, the CSRC has accelerated the research and demonstration of a package of policy measures to further support scientific and technological innovation, and relevant documents will be issued in due course. The general idea is to improve the support mechanism of capital market for scientific and technological innovation, guide resources to gather in the field of scientific and technological innovation, stimulate the vitality of market scientific and technological innovation, boost scientific and technological enterprises to become better and stronger, and smooth the virtuous circle of "science and technology-industry-finance".
Main policy measures: First, establish a "green channel" for listing financing, bond issuance, mergers and acquisitions of technology-based enterprises that break through key core technologies, improve the efficiency of audit and registration, and increase the supply of high-quality listed companies. Second, continue to improve the equity incentive system and mechanism of science and technology enterprises, optimize the implementation procedures, exempt short-term transactions, and help science and technology enterprises attract stable talents. Third, optimize the financing environment of technology-based listed companies, actively study more types and ways of financing to meet the needs of technology-based enterprises, and study and establish the science and technology innovation board and Growth Enterprise Market shelf distribution system. The fourth is to appropriately improve the inclusiveness of restructuring and valuation of light-asset technology-based enterprises, and support technology-based enterprises to comprehensively use various payment tools to implement restructuring. Fifth, strengthen the bond market’s accurate support for scientific and technological innovation, focus on supporting corporate bond financing of high-tech and strategic emerging industries, incorporate high-quality corporate science and technology bonds into benchmark market-making varieties, and support new infrastructure and scientific and technological innovation industrial parks to issue REITs in the field of scientific and technological innovation. In addition, actively support the development of private equity venture capital funds, implement differentiated regulatory policies, simplify the registration and filing of high-quality private equity venture capital funds, and guide venture capital funds to invest more in scientific and technological innovation.
4. Recently, the market has paid more attention to the IPO rhythm, and it is also rumored that refinancing will be suspended. What does the CSRC think?
A: To realize the sustainable development of the capital market, we need to fully consider the dynamic and positive balance between the two ends of investment and financing. Without the steady operation of the secondary market, the financing function of the primary market will be difficult to play effectively. We always adhere to the scientific and reasonable normalization of IPO and refinancing, and at the same time fully consider the affordability of the secondary market, strengthen the countercyclical adjustment of the primary and secondary markets, and better promote the coordinated and balanced development of the primary and secondary markets. The market will feel this change.
5. What are the specific considerations for deepening the market-oriented reform of M&A?
A: M&A is an important way to optimize resource allocation and stimulate market vitality. Since 2019, there have been about 3,000 mergers and acquisitions in the whole market every year, and the transaction amount has exceeded 1.5 trillion yuan. In the next step, we will adhere to the problem orientation, conform to the market demand, and deepen the market-oriented reform of mergers and acquisitions. First, appropriately improve the valuation inclusiveness of light asset technology-based enterprise restructuring, and support high-quality technology innovation enterprises to become bigger and stronger through mergers and acquisitions. The second is to optimize and improve the audit mechanism such as "small amount and quick", extend the validity period of financial materials for stock issuance and restructuring, and further improve the efficiency of restructuring market. The third is to introduce the relevant rules for listed companies to issue convertible bonds to purchase assets, and enrich the payment methods for mergers and acquisitions. The fourth is to promote central enterprises to increase the integration of mergers and acquisitions of listed companies, and inject high-quality assets into listed companies through mergers and acquisitions channels to further improve the quality of listed companies.
6. Share repurchase plays an important role in stabilizing stock prices and boosting confidence. What considerations does the CSRC have in supporting share repurchase?
A: Share repurchase is an internationally accepted important means to safeguard the company’s investment value, improve the corporate governance structure and enrich the investor’s return mechanism. It is also a basic institutional arrangement in the capital market. In recent years, the CSRC has encouraged and supported listed companies to carry out share repurchase in many ways, and the scale of repurchase in the A-share market has increased steadily as a whole. In the next step, we will work with relevant parties to further optimize the share repurchase system, support more listed companies to stabilize and boost their share prices through share repurchase, safeguard shareholders’ rights and interests, and lay a solid foundation for a stable market operation. On the one hand, accelerate the revision of repurchase rules, relax the repurchase conditions of listed companies when their share prices fall sharply, relax the repurchase restrictions of new listed companies, relax the restrictions on the repurchase window period, and enhance the convenience of implementing repurchase. On the other hand, it encourages qualified listed companies to actively carry out repurchase, and urges listed companies that have issued repurchase plans to speed up the implementation of repurchase plans, increase repurchase efforts, and send positive signals in a timely manner.
7. Recently, the market has paid more attention to the major shareholder’s reduction. What are the next considerations in improving the reduction system and strengthening the supervision of the reduction behavior?
A: The major shareholder and Dong Jiangao are the "key minority" of listed companies. They have special obligations and responsibilities in the company’s business development and governance, and should earnestly safeguard the interests of the company and minority shareholders. The Securities Law, the Company Law and relevant regulatory rules clearly stipulate the holding period and the number of shares sold by major shareholders and Dong Jiangao. The major shareholder and Dong Jiangao shall strictly abide by it, and shall not evade the reduction restrictions in any way. Recently, we have clarified the regulatory caliber for the major shareholder and Dong Jiangao’s reduction in divorce, dissolution and separation, and eliminated possible loopholes in the system.
In the next step, the CSRC will continue to do a good job in reducing its holdings. On the one hand, resolutely crack down on illegal reduction, promptly and seriously deal with excessive reduction, undisclosed reduction, circumvention of restricted reduction, etc., and comprehensively use various means such as administrative supervision measures, administrative penalties, self-discipline measures or trading restrictions to severely punish illegal subjects, thus creating a shock and maintaining the order of the capital market. On the other hand, pay close attention to the problem of shareholder reduction reflected by the market, carefully analyze and evaluate, study and optimize the reduction rules in a timely manner, further standardize the reduction behavior of major shareholders and directors and supervisors, and enhance the institutional binding force.
8. Recently, there has been a lot of discussion on the T+0 trading system in the stock market. What do you think of this? Will this system be introduced?
A: Whether T+0 trading should be implemented in China’s stock market has been widely discussed in recent years. On the whole, there are great differences in various aspects. We believe that T+0 trading objectively plays a positive role in enriching trading methods and improving trading activity. However, we should also see that the stock price trend of listed companies depends on the quality and operating efficiency of listed companies, and the medium and long-term impact of T+0 trading method on market valuation is limited. At present, the A-share market is dominated by small and medium-sized investors, with 96% of the small retail investors holding shares with a market value of less than 500,000 yuan. At this stage, the implementation of T+0 trading may amplify market speculation and manipulation risks, especially institutional investors’ extensive use of programmed trading, which will aggravate the disadvantaged position of small and medium-sized investors and is not conducive to fair trading in the market. We believe that it is premature to implement T+0 trading at this stage.
9. Recently, there have been many calls from investors to reduce the stamp duty rate of securities transactions. What do the CSRC think of this?
A: We have paid attention to the market’s appeal and concern about lowering the stamp duty rate on securities transactions. Historically, adjusting the stamp duty on securities transactions has played a positive role in reducing transaction costs, activating market transactions and embodying the inclusive effect. It is recommended to know the specific situation from the competent authorities.
10. In March this year, the new regulations for overseas listing were officially implemented, and the CSRC indicated that more "green light" cases would be launched. What is the progress in this regard? What’s the next step?
A: Since the implementation of the new regulations on overseas listing filing, enterprises have actively submitted filing materials, and the number of applicants has increased significantly. We have continuously improved the requirements of filing compliance standards, strengthened communication and coordination between domestic and overseas regulators, and solidly promoted filing work. Nineteen enterprises of various types have completed listing and filing in Hong Kong and overseas in the United States. In the next step, we will continue to unblock the overseas listing channels of enterprises and launch more qualified "green light" cases, including VIE architecture enterprises and platform enterprises that are more concerned by the market. At the same time, promote the formation of a more transparent, efficient and smooth overseas listing supervision and coordination mechanism, respect enterprises’ independent choice of overseas listing places according to laws and regulations, and support qualified enterprises to make good use of two markets and two resources to achieve standardized and healthy development.
11. The bond market is an important part of the capital market. What are your considerations in implementing the deployment of "active market and boosting confidence"?
A: Since the beginning of this year, we have persisted in striving for stability and made every effort to promote the function of the bond market and achieved positive results. In terms of steady growth of services, we adhered to the coordinated development of corporate bonds, corporate bonds, ABS and REITs. From January to July this year, the total financing of various bonds issued by the exchange bond market was 7.32 trillion yuan, exceeding the level of last year. Among them, the issuance of science and technology bonds exceeded 167 billion yuan and the issuance of green bonds exceeded 90 billion yuan. By the end of July, a total of 32 REITs projects had been issued and listed, raising a total of nearly 100 billion yuan. In terms of basic system reform, the reform and deployment of the party and state institutions were implemented, and the transfer of corporate bond responsibilities was efficient and smooth. We issued guidance on implementing the reform of the corporate bond registration system, improving the quality of intermediary bond practice, and promoting the deepening of the reform of the bond registration system. In terms of prevention and control of key risks, we strengthened the prevention and control of bond risks in key areas such as urban investment and real estate, and the risk of default remained generally convergent.
In the next step, we will further introduce measures to stabilize expectations and confidence to stimulate the vitality of the bond market. First, comprehensively improve the vitality and quality of the bond market. Strengthen the reform of the investment side of the bond market and promote the full participation of banking institutions in the bond market of the exchange. We will strengthen the ranks of bond market makers, steadily push forward the reform of the inquiry and quotation system, and deepen the opening up of the bond market. The second is to accelerate the normal issuance and high-quality expansion of REITs. We will launch REITs-related indexes and REITs index funds, optimize the REITs valuation system and issue inquiry mechanism, cultivate professional REITs investors, and accelerate the interconnection between the REITs market and the Hong Kong market. The third is to adhere to the bottom line thinking and do a good job in risk prevention and control in key areas such as real estate and urban investment. To adapt to the new situation that the relationship between supply and demand in the real estate market has undergone major changes, we will continue to do a good job in supporting the stable and healthy development of the real estate market in the capital market. Maintain the overall stability of the financing channels of housing enterprises’ stock bonds and support the reasonable financing needs of normal operating housing enterprises. Adhere to the "one enterprise, one policy" and steadily resolve the default risk of bonds of large housing enterprises. Strengthen the risk monitoring and early warning of urban investment bonds, take the "explosion-proof thunder" of open market bonds and non-standard debts as the top priority, and make every effort to maintain the smooth operation of the bond market.
