The international seminar on frontline regulation of stock exchanges, co-held by the Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE), was unveiled in Shanghai on August 25, with an aim to further implement the major requirements at the national financial work conference, comprehensively carry out the deployment put forward at the mid-year regulatory work symposium of the national securities and futures regulatory system, thoroughly promote the legal, comprehensive and strict regulation, and attach importance to the core of giving full play to the role of exchanges in frontline regulation. Liu Shiyu, Chair of the China Securities Regulatory Commission (CSRC), delivered a speech at the seminar.
Liu says that as an organizer, operator and self-regulator of the market, a stock exchange is on the frontline in the capital market regulatory system and boasts its unique advantages and irreplaceable role. Internationally, an exchange naturally has a regulatory function, which is generally acknowledged by laws. An exchange, no matter how the form of organization changes, always plays a role of regulation. This is not only an international consensus, but also yields a lot of practices. According to practices in China, exchanges should firmly carry out frontline regulation, with more improvements to be made as well. Since 2016, the SSE and the SZSE have changed their working stresses to frontline regulation, explored and established the trading regulation mode with the member regulation as the center, and carried out thorough regulation on listed companies’ information disclosure, after which market chaos have been curbed and the market ecology has witnessed positive changes. The steady growth of China’s capital market over the recent two years owed to that the SSE and the SZSE initiatively assumed the duty of frontline regulation, and their role in this aspect should be better played in the future. It is hoped that exchanges both at home and abroad work together for frontline regulation. The CSRC will more vigorously support pragmatic cooperation of exchanges both at home and abroad, so as to inject a new impetus into the global capital market’s steady prosperity.
At the seminar, all the exchanges introduced their experience in how to play an exchange’s role in market regulation and risk control and compare notes on an array of core issues, including how to balance the market’s organization and development and its regulation and standardization as a regulator, how to further cement the combination of the administrative regulation and the exchange’s self-regulation, and how to encourage members to more initiatively assume their responsibilities of management on clients’ trading. All the exchanges say that as the international capital market is facing more challenges, controlling financial risks has become a crucial point for each county’s economic and financial work. In spite of different market characteristics and diversified regulatory practices, all the capital markets hold that strengthening market regulation will guarantee the capital markets’ long-term, steady and sound growth, and all the exchanges should effectively play the role of frontline market regulation. Especially, exchanges of some emerging markets including Korea and India hold that the capital markets with individual investors at the majority need stronger regulation, and the exchanges should timely and strictly regulate illegal transactions related to serious speculation and false reporting, in a bid to maintain fair transaction and normal trading order. Besides, all the exchanges reach a consensus on strengthening international cooperation and discussing to build a cross-exchange and cross-border regulatory system, saying that they will work together, continuously cement cooperation and jointly carry out regulation, in order to handle impacts possibly resulted from future global financial risks.
In the next stage, the SSE and the SZSE will assume the frontline responsibility of market regulation and risk control, build and perfect the trading regulation mode with the member regulation as the center, further cement ties with exchanges both at home and abroad, draw their merits in their regulatory experience, consistently introduce more regulatory measures, enhance their regulatory ability and cement their regulatory effectiveness, propel the cross-market monitoring information sharing, protect the legitimate rights and interest of small and medium-sized investors, boost the capital market’s sound and stable growth, with an aim to embrace the successful convention of the 19th CPC national congress with outstanding achievements.
Delivering speeches at the seminar were also officials of the CSRC departments and agencies and the representatives from eleven exchanges including the SSE, the SZSE, NASDAQ, Hong Kong Exchanges and Clearing Limited, Pakistan Stock Exchange, London Stock Exchange, Japan Exchange Group, Bombay Stock Exchange, the regulation company of Singapore Exchange, Taiwan Stock Exchange Corporation and Korea Exchange.