The 14th Five-Year Development Plan of Shanghai Stock Exchange Released Today

31 May 2022

The Shanghai Stock Exchange (SSE) released today its recently-formulated 14th Five-Year Development Plan of Shanghai Stock Exchange (hereinafter referred to as the Plan). The Plan aims to thoroughly implement the decisions and arrangements of the CPC Central Committee, effectively adapt to the main goals and key tasks of the national “14th Five-Year Plan”, and better meet the work requirements from the central inspection and rectification campaign.

In terms of guiding philosophy and basic principles, the Plan adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, earnestly implements the major decisions and arrangements of the CPC Central Committee and the State Council. Under the unified leadership of the Party Committee of the China Securities Regulatory Commission (CSRC), the Plan firmly adheres to the “Four Consciousnesses”, the “Four-sphere Confidence”, the “Two Establishments”, the “Two Upholds”, and to the overall goal of “building a regulated, transparent, open, dynamic and resilient capital market”. Meanwhile, it keeps in line with the work policy of “building the system, non-intervention, and zero tolerance” and the work requirements of “standing in awe of the market, the rule of law, expertise and investors, and forging synergy in comprehensive support for reform, development and stability of the capital market”. While accurately grasping the new development stage in line with the new development philosophy, it serves the construction of the new development paradigm, and upholds the CPC’s overall leadership in the ongoing service for the national strategies and the real economy. Meanwhile, it persists in the people-centered approach and the orientation toward the market, the rule of law and internationalization, adheres to bottom-line thinking, and remains committed to the financial development with Chinese characteristics. All this contributes to building a modern socialist country through the renewed efforts to build the SSE into a world-class exchange and propel high-quality economic and social development.

In terms of development goals, the Plan proposes that by 2025, the SSE is due to effectively implement the information disclosure-centered reform of the registration-based securities issuance system, advance innovation in key systems, strive to build a regulated, transparent, open, dynamic and resilient capital market, and contribute to Shanghai’s efforts in developing into an international financial center and sci-tech innovation center. By 2035, the SSE will strive to build itself into a sci-tech innovation capital center and a world-class exchange with complete functions, efficient operation, leading technology and global influence, which matches China’s position as a great modern socialist country.

In terms of measures, the Plan proposes 11 key tasks. First is to steadily advance the reform of the registration-based IPO system. The SSE will steadily promote the market-wide reform by adhering to the “three principles” for the reform of the registration-based issuance system, optimize the mechanism of stock issuance review, clarify the position of the exchange’s review function, properly perform the duties of review and checking, and improve the IPO underwriting mechanism. Second is to propel the high-quality development of the stock market. The SSE will implement the two-wheel strategy based on the main board and the STAR Market with upgraded capacity for serving the self-reliance and self-improvement of science and technology, promote the improvement of the quality of listed companies, and facilitate the flow of more medium and long-term funds into the market so as to advocate the culture of long-term investment, value investment and rational investment. Third is to advance the healthy development of the bond market. The SSE will rationalize the issuance review mechanism for corporate bonds for an orderly financing function, continue to strengthen the development of the investment side of the SSE’s bond market by enhancing products and risk management tools in the bond market, and improve the mechanism of default risk prevention and resolution. Fourth is to propel innovation in products and trading mechanisms. The SSE will strive to develop the fund market, introduce more variety in derivative products, actively develop the REITs market, support the launching of mature projects in important areas such as innovation-driven development, green development and safeguarding people’s livelihoods as soon as possible, continue to rationalize the trading mechanism, and enhance the compilation of core indexes. Fifth is to serve the national goal of carbon peaking and carbon neutrality. The SSE will provide strong support for financing of green enterprises and projects, enhance environmental information disclosure of listed companies, and introduce more green finance products. It will also deepen international cooperation in green finance, and enhance the green and low-carbon development of the exchange itself. Sixth is to advance high-level two-way opening up. The SSE will further develop market connectivity mechanisms, introduce more cross-border products, improve the openness of the bond market, strengthen the development of the exchanges of whom the SSE is a stakeholder, and deepen international communication and cooperation in multiple aspects. It will also greatly support Shanghai in building an international financial asset trading platform and a global asset management center. Seventh is to accelerate digital development. The SSE will steadily press ahead with the development of new trading systems for bonds, bidding, and options, build a new-generation core trading system, promote the integration of technology regulation and service, rationalize the data governance system, enhance the capabilities of IT governance, consolidate the construction of digital infrastructure, and form a high-standard, open and mutually beneficial digital ecosystem for the industry. Eighth is to improve the quality of market services. The SSE will build an integrated service model centered on “cultivation services and comprehensive services”, and strengthen investor education and protection with an improved “exchange-member-investor” mechanism. Meanwhile, the SSE will further improve the China Securities Museum, and cultivate the culture of the capital market. Ninth is to enhance the effectiveness of self-regulation. The SSE will implement the requirements for “streamlining procedures, delegating power, and improving services”, advance the establishment of a concise and user-friendly system of rules, and improve the self-regulatory system. In addition, it will enhance the regulation of listed companies, and continuously push forward the regulatory transformation. It will continue to improve the regulation of trading and severely crack down on violations in securities trading, strengthen the regulation of members, and further tighten the responsibilities of intermediaries. Tenth, it will strengthen the market-wide risk prevention and control system. The SSE will step up risk prevention and control in key areas such as stock pledges and bond defaults, enhance ex ante research and prediction of market risks, and firmly hold the bottom line of forestalling systemic financial risks. Eleventh is to make the information technology safer and more controllable. The SSE will improve operational safety, enhance the operation and maintenance of technical infrastructure and the ability of security assurance, enhance the network security infrastructure, improve the ability to deal with extreme network security risks, strengthen the self-control of key and core technologies, and increase the investment in information technology application and innovation.

The Plan includes strengthened measures in five aspects, namely strengthening the overall leadership of the Party, emphasizing integrity of conduct and anti-corruption, improving the internal governance system, building first-class talent, and enhancing the implementation mechanism, to ensure the smooth implementation of the plan.