YICAI｜China's Securities Watchdog Aims to Draw Medium-, Long-Term Funds Via New Reform
(Yicai) March 7 -- China's securities regulator will take deepening the comprehensive reform of capital market investment and financing and accelerating the new round of reform and opening-up as the driving force to attract medium and long-term funds to enter the Chinese stock market, laying a solid foundation for its healthy development.
The measures include deepening the institutional reforms of the Shanghai Stock Exchange Science and Technology Innovation Board, the Shenzhen SE's Nasdaq-like ChiNext Board, and the Beijing SE, Wu Qing, chairman of the China Securities Regulatory Commission, said during a conference at the third session of the 14th National People's Congress yesterday.
The reform aims to promote the formation of an effective balance of power mechanism among small and medium investors with major shareholders of listed companies, such as actual controllers, Wu noted. In addition, a series of regulations will be revised to strengthen the responsibilities of financial market intermediaries as "gatekeepers," he added.
The CSRC will also focus on removing bottlenecks preventing medium- and long-term funds, including social security, insurance, and wealth management funds, from entering the stock market, Wu said. It will steadily expand high-level institutional opening-up, improve the overseas listing filing system for Chinese firms, and expand the interconnection channels for cross-border capital flows, he noted.
Promoting and attracting medium- and long-term funds to enter the market is a systematic project that requires the cooperation of multiple parties, Qi Shi, NPC deputy and chairman of East Money Information, told Yicai. It not only needs to open the door to let funds in but also requires improving various supporting policies for such funds to enter the market so that long-term ones can preserve and appreciate in value, he added.
More Support for Innovative Firms
It is necessary to improve and make full use of various listing systems for innovative science and technology companies, precisely support high-quality tech firms to go public, and remove all sorts of existing bottlenecks, according to Wu.
It is also necessary to continuously improve the regulatory rules for private equity and venture capital funds, smooth the diversified exit channels of funds, and achieve a virtuous capital flow cycle, Wu noted.
In addition to supporting tech companies to go public, the CSRC will also help innovative science and technology companies complete financing via issuing bonds, convertible bonds, preferred stocks, and other means through institutional reforms, providing them with more comprehensive and efficient capital market services, Wu pointed out.
"The outstanding performance of DeepSeek in the global artificial intelligence field has not only shocked the AI industry but also given the world a new understanding of China's scientific and technological innovation capabilities and driven the revaluation of its asset," Wu said, adding that the CSRC will go on improving the institutional mechanisms and product service systems supporting new productive forces.
More products and tools suitable for medium- and long-term investment, including index products, infrastructure real estate investment trusts, green bonds, and others, will likely emerge in the capital market, according to Qi. The constant improvement of the quality and investment value of listed firms will also provide a more powerful fundamental support for stabilizing the confidence of these funds, he added.