China Securities Regulatory Commission: Enriching Policy Tools for Dealing with Market Volatility and Resolutely Preventing Abnormal Stock Market Volatility
2024-06-19
On June 18th, the Party Branch of the Market Supervision Department of the China Securities Regulatory Commission released an article titled "Promoting High Quality Development of the Capital Market through Strong Supervision and Risk Prevention". It is mentioned that regulatory penetration should be strengthened in market access, daily supervision, on-site inspections, and other aspects, especially in maintaining a high-pressure situation of "zero tolerance" for various illegal and irregular activities. Strictly control the issuance and listing, license issuance, product registration, and other entry procedures. We need to balance the relationship between the investment and financing sides, accelerate the reform of the investment side, pay more attention to the interests and legitimate rights and interests of investors, and promote the coordinated development of the primary and secondary markets. We need to promote and strengthen the construction of the rule of law in the capital market, and increase the three-dimensional accountability of administration, civil affairs, and criminal cases. The article states that in the next step, the China Securities Regulatory Commission will implement the deployment requirements of the new "National Nine Articles" from the following five aspects, highlight the strengthening of the foundation, strict supervision and strict management, and do a good job in risk prevention and supervision with a sense of responsibility that is always at ease, contributing to the high-quality development of the capital market and serving the economic and social development. Firstly, we will ensure the implementation and implementation of the new "nine national regulations" and supporting systems, and focus on enhancing the inherent stability of the market. Next, the China Securities Regulatory Commission will comprehensively promote the implementation of supporting policies and measures that have been introduced, accelerate the filling of shortcomings and weaknesses in various fields such as issuance and listing, share reduction, delisting, trading, and industry institutional supervision, promote the systematic reshaping of the basic system of the capital market, strive to achieve practical results, and continuously improve market expectations. The second is to strengthen the "five major supervision" and focus on improving the pertinence, adaptability, and effectiveness of supervision. Specifically, it includes strengthening the full chain supervision of listed companies and enhancing investment value by focusing on strict entry barriers, continuous supervision, and increasing delisting supervision; Further strengthen the responsibility of intermediary agencies as gatekeepers, guide industry institutions to correct their business concepts, enhance their compliance level, professional service capabilities, and core competitiveness; Strengthen the monitoring and supervision of trading behavior of key investors, accelerate the improvement of quantitative trading supervision system and mechanism, and strengthen high-frequency trading supervision; Strictly crack down on various illegal and irregular activities such as fraudulent issuance, financial fraud, insider trading, and market manipulation in accordance with the law. The third is to adhere to promoting development and stability through reform, and to do a good job in serving the real economy. Specifically, we will further improve the multi-level capital market system, enhance service coverage and accuracy, enhance institutional adaptability and inclusiveness, strengthen patient capital, better serve the implementation of national strategies such as technological innovation, green development, state-owned enterprise reform, and the development and growth of small and medium-sized enterprises and private enterprises, and strongly support the development of new quality productivity. Carry out a comprehensive evaluation of capital market reform and promote the continuous deepening of important institutional reforms such as the stock issuance registration system. Promote the active entry of long-term funds such as insurance funds, social security funds, and pensions into the market, and break through institutional barriers. Adhere to the coordination of high-level institutional openness and security in the capital market, and expand and optimize cross-border connectivity mechanisms. The fourth is to strengthen bottom line thinking and fight a protracted battle to prevent and resolve risks in the capital market. The China Securities Regulatory Commission (CSRC) will continue to work hard to enhance confidence and improve expectations, prudently resolve risks in key areas such as private equity funds and bond defaults, strictly control incremental gains, and properly manage existing stocks. Enrich policy tools to cope with market fluctuations, strengthen strategic force reserves and market stability mechanism construction, and resolutely prevent abnormal fluctuations in the stock market. The fifth is to implement the "three excellent" standards and provide strong guarantees for strong supervision and risk prevention through high-quality self construction. Next, the China Securities Regulatory Commission will highlight the strengthening of political construction, solidly promote key work such as strengthening theoretical armament, enhancing professional capabilities, deepening work style construction, and promoting clean governance, implement accountability regulations for preventing and resolving financial risks, and comprehensively consolidate regulatory responsibilities. (Lai Xin She)
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