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Regulator: Capital market reform to be deepened

By SHI JING in Shanghai | China Daily | Updated: 2023-12-05 09:19
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The view of Shanghai's CBD is seen in this photo. [Photo/VCG]

More measures will be introduced to safeguard stable operations of the Chinese capital market, the China Securities Regulatory Commission said.

According to Yi Huiman, chairman of CSRC, these measures will be part of efforts to formulate a policy framework to build a modern capital market with Chinese characteristics, which should be safe, regulated, transparent, open, active and resilient.

Yi made the comments in an interview to State-owned Xinhua News Agency, which was released on Monday.

The reforms to the Chinese capital markets will be further deepened by introducing more substantial policies, he added.

The fundamental role of the registration-based initial public offering mechanism should be further consolidated, providing a bigger support to self-reliant high-tech companies or those playing a pivotal role in the modern industrial system, Yi said.

More medium- to long-term capital should be introduced. IPO pricing, refinancing and reduction in holdings should be better balanced, which will be conducive to a dynamic balance between investment and financing, he said.

A multilayered capital market system should be completed while equity financing should be diversified, Yi said.

Various stock exchanges should stick to their respective positions, while private equity firms and venture capital funds should play an active role in completing the market structure, he said.

The bond market should seek high-quality development. Real estate investment trusts should be promoted. The futures and derivatives market should seek development in a prudent and orderly manner to elevate China's influence in commodities pricing, he added.

A new three-year action plan to improve the quality of listed companies will be implemented, said Yi.

Policies regarding mergers, restructuring, equity incentives and dividend distribution will be optimized. Listed companies should improve their competitiveness and lead coordinated development along the industrial chain. This will help listed companies serve as the foundation of China's high-quality economic development, he said.

Meanwhile, high-level institutional opening-up should be advanced in the capital market. The connectivity programs will be expanded, and cross-border investment and financing will be further facilitated, according to Yi.

He also stressed the importance of strengthening supervision and preventing risks, which is also crucial to the high-quality development of the financial sector.

A countercyclical adjustment mechanism in the primary and secondary markets should be improved. Public companies' repurchases or shareholders' plans to increase their holdings will be encouraged and better guided, said Yi.

Risks such as the occupation of funds by major shareholders, excessive leverage, and lack of isolation between industrial capital and financial capital will be monitored and managed at the source, he said.

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