Shanghai Securities News｜SSE "STAR Market Eight Measures" Symposium for Securities Companies Spurs Further STAR Market Reform

Translated from Shanghai Securities News

(Shanghai Securities News) (Reporter Qi Doudou) On July 1, the Shanghai Stock Exchange (SSE) convened a symposium on the "STAR Market Eight Measures" with research institute representatives from securities companies. The event focused on extensive discussions, feedback collection, and the gradual execution of policies to advance STAR Market reform. According to the Shanghai Securities News reporter at the symposium, attendees focused on current market concerns and discussed in-depth the promotion of the "STAR Market Eight Measures" implementation, putting forward constructive suggestions.

"STAR Market Eight Measures" clarifies the next stage goals

Representatives of securities companies agree that the "STAR Market Eight Measures" clearly outlines the objectives and tasks for the next stage of STAR Market development. This is of great significance for further leveraging the STAR Market's role as a testing ground for reforms, better serving technological self-reliance, and promoting the development of new productive forces. The "STAR Market Eight Measures" fully embodies the political and people-centric nature of capital market work, focusing on strengthening supervision, forestalling risks, and promoting high-quality development by proposing a comprehensive set of reform initiatives.

On the entry side, we aim to reinforce the "hard tech" positioning of the STAR Market and improve the precise identification mechanism for tech companies. This will support the listing of high-quality, unprofitable tech innovation enterprises with key core technologies, significant market potential, and prominent tech attributes. Currently, the industry distribution of companies listed on the STAR Market is highly concentrated in the hard tech sector. In the future, market resources are expected to further accelerate towards agglomeration in fields related to new productive forces.

On the issuance side, we aim to improve the issuance and underwriting system. Measures such as reducing the proportion of high-price eliminations, increasing market value placement requirements, and imposing stricter qualification restrictions on institutions that frequently quote high prices will more effectively ensure rational bidding by offline investors.

On the continuous supervision side, we focus on serving new productive forces and have introduced numerous innovative reform measures in areas such as refinancing, M&A, and equity incentives. These measures positively address the pain points and bottlenecks faced by tech innovation enterprises in their high-quality development. For instance, in the realm of M&A and restructuring, we encourage the integration of upstream and downstream industrial chains and support mergers aimed at optimizing and strengthening core businesses. This strategic focus not only enables listed companies to concentrate on their primary operations but also helps companies with diminished market competitiveness exit efficiently through M&A. Furthermore, by supporting diverse payment methods such as convertible bonds and installment payments, we enhance the flexibility of the M&A and restructuring system. Simultaneously, we've increased the inclusiveness of valuation for M&A, further showcasing the system's adaptability.

Efforts are underway to expedite the implementation of the "STAR Market Eight Measures"

Representatives of securities companies believe that in recent years, China has made significant progress in science and technology. Emerging industries such as integrated circuits, artificial intelligence, and new energy vehicles have thrived, with the technological level in many industrial fields leading globally. There have been breakthroughs from scratch and import substitutions in key technological fields, continuously enhancing global scientific and technological competitiveness and influence. The introduction of the "STAR Market Eight Measures" signals a new phase in the reform of the STAR Market, continuously solidifying the institutional foundation for its high-quality development. The precision, inclusiveness, and adaptability of the capital market in supporting technological innovation will be significantly enhanced.

Representatives of securities companies suggested adhering to self-confidence and self-reliance, maintaining reform determination, accelerating the implementation of various systems under the "STAR Market Eight Measures", focusing on improving the quality and efficiency of capital market services for new productivity development, and nurturing global competitive tech innovation enterprises.

First, we should remain patient and confident, and more accurately grasp the laws of technological innovation and the development trends of China's science and technology sector. Independent innovation is the cornerstone for enterprises to overcome challenges and grow stronger. As China continues to enhance the transformation and industrialization of scientific and technological achievements, the global industry and supply chains will be reshaped. This will further expand the operational space of Chinese tech innovation enterprises worldwide, and their future profitability is expected to increase significantly.

Second, we need to strengthen policy guidance, enforce strict system implementation, rigorously control the entry threshold, and adhere to the STAR Market's focus on hard tech. We must increase inclusiveness towards hard tech to genuinely direct market resources towards high-quality hard tech enterprises.

Third, we should accelerate the realization of a series of demonstration cases. This includes implementing various reform measures such as financing, mergers and acquisitions, and equity incentives, to set clear market expectations and boost market confidence.

Fourth, certain detailed regulations should be refined, such as increasing the market value requirements for offline investors in STAR Market stocks, optimizing the market maker mechanism, incorporating STAR Market ETFs into the fund trading platform, and launching STAR 50 Index futures and options. "These are key regulations that the market is highly concerned about and they play a positive role in attracting more long-term capital. It is recommended to expedite the clarification of specific regulations or the implementation roadmap," said a representative of the securities trader.

Fifth, we should further diversify the industry types in the STAR Market to mitigate cyclical and structural impacts caused by excessive industry concentration. We need to support and encourage the listing of upstream and downstream enterprises in the industrial chain incubated by high-quality leading companies on the STAR Market, and promote the listing of representative enterprises in cutting-edge technology innovation fields such as low-altitude economy, robotics, and large aircraft.

Sixth, we should diversify wealth management tools. From the perspective of residents' asset allocation, accelerate the launch of multi-asset ETFs to meet investors' diverse financial needs in a one-stop manner.

SSE: Securities companies must fully utilize their three major functions

A relevant official from SSE stated that the new "Nine National Guidelines" represent a reconstruction of the capital market's concepts and structure. In alignment with the directives of the Central Financial Work Conference and the new "Nine National Guidelines", the SSE will expedite the shift in mindset, and steadfastly uphold the principles of "strengthening supervision, mitigating risks, and promoting high-quality development". It will meticulously consider and assess the opinions and suggestions of participating securities companies, respect the principles of tech innovation, and adopt more practical, detailed measures alongside representative cases. This effort aims to effectively implement the "STAR Market Eight Measures", stimulate enterprises' intrinsic motivation as innovators, and better support tech innovation and new productive forces.

"The high-quality development of the capital market requires the collective efforts of all market participants." Securities companies are witnesses, participants, and promoters of the STAR Market reform and development. They should thoroughly study and implement the spirit of the Central Financial Work Conference, and fully leverage their roles as service providers of direct financing, gatekeepers of the capital market, and managers of social wealth. By forming a joint effort from all parties to drive reform and development, they can collaboratively ensure the steady and sustainable progress of the STAR Market," said the relevant official from SSE.

Given this background, the relevant official from SSE put forward specific requirements for securities companies: First, they need to strengthen confidence, fully recognizing the robust strength and broad prospects of China's scientific and technological development. They should effectively communicate the narrative of the STAR Market serving tech innovation, enhance positive publicity and guidance, and promote a positive outlook on China's economy.

Second, they must maintain resilience, actively addressing new situations and issues arising in the course of the reform. They should accurately grasp the long-term positive trends of the capital market, firmly establish the concepts of rational investment, value investment, and long-term investment, excel in counter-cyclical strategies, and strengthen professional capacity building.

Third, they should strengthen communication and utilize channels for gathering opinions and suggestions from both investment and financing perspectives. They need to actively listen to and relay the concerns of listed companies and investors to the exchange, timely address key market issues, and collectively foster a positive public opinion environment in the capital market.

According to the reporter, SSE will continue organizing activities such as symposiums, field visits, and specialized training sessions. These efforts aim to strengthen communication with all market participants, enhance the promotion of the concepts, policies, and exemplary cases related to the "STAR Market Eight Measures", understand market participants' expectations, and guide them in translating these requirements into practical action.