Cai Jianchun, Member of the National Committee of the Chinese People's Political Consultative Conference and President of Shanghai Stock Exchange, Proposes to Accelerate the Development of a Multi-tiered Market for Real Estate Investment Trusts

According to People's Financial News on March 8, Securities Times reporters learned that Cai Jianchun, member of the National Committee of the Chinese People's Political Consultative Conference and President of Shanghai Stock Exchange (SSE), proposed to accelerate the development of a multi-tiered market for real estate investment trusts (REITs). This includes: First, leveraging the “dual engines”of both initial public offerings and additional fundraising on equal terms to expand the market. The criteria for initial offerings should be further optimized to improve the quality and efficiency of regular REITs issuance. Support should be stepped up for key projects in critical fields such as rail transit, communication towers, and oil pipelines. It is necessary to make the mechanism for raising additional funds for REITs easier and support M&As by REITs through various financing methods, thereby enhancing their capability to raise intrinsic value. Second, accelerating new capital inflow to stimulate the REITs market. Efforts should be made to facilitate insurance funds and other institutional investors’ allocation in the REITs risk factors and reduce capital at risk. More needs to be done to quickly implement the policies for social security funds to invest in REITs, and to open access to REITs for annuity and pension funds. It is important to accelerate the launch of REITs-ETF products and index-based products and promote the inclusion of REITs in the investment scope of public funds and the Shanghai-Shenzhen-Hong Kong Stock Connect targets. Third, speeding up special legislation and optimize the product mix. Under the framework of the Company Law and the Securities Law, relevant regulations or administrative measures on REITs should be formulated to optimize the product mix of REITs and give better play to the industry side in the governance mechanism. (Securities Times, Zhang Shuxian)

The above information is provided for reference purposes only and does not constitute investment advice.