YICAI | China to Steadily, Prudently Expand Connectivity of Financial Markets, 15th Five-Year Plan Outline Says
(Yicai) March 16 -- The outline of China's 15th Five-Year Plan proposed to steadily and prudently expand the connectivity of financial markets, optimize the Qualified Foreign Institutional Investor program, broaden the range of investable products, and advance cross-border direct financing for eligible enterprises.
China should build a financial system that aligns with technological innovation, optimizing foundational systems, such as issuance and listing, information disclosure, mergers and acquisitions, and delisting, according to the outline of the 15th Five-Year Plan released by the central government on March 13.
Moreover, the country should enhance the level of openness in capital projects, broaden channels for foreign investment in the securities market, support the construction of a multi-level cross-strait market, and encourage eligible Taiwanese enterprises to list in the Chinese mainland, per the outline.
China should also expand the methods of utilizing foreign investment, improve the management of foreign M&As, and broaden channels for foreign investment in the securities market, the outline stated.
To accelerate the construction of a strong financial nation, the outline called for deepening the comprehensive reform of investment and financing, enhancing the inclusiveness and adaptability of capital market systems, and increasing the proportion of direct financing.
Developing diversified equity financing, accelerating the construction of a multi-level bond market, steadily developing futures, derivatives, and asset securitization, and strengthening trading supervision and investor protection were other suggestions mentioned in the outline.
China should expand patient capital and improve policies supporting medium- and long-term funds entering the market, optimize the financial institution system, encourage various financial institutions to focus on their core businesses, improve governance, and develop in a differentiated manner, per the outline.
Moreover, the country should support large state-owned financial institutions in enhancing their comprehensive service capabilities, enforce strict access standards and regulatory requirements for small- and medium-sized financial institutions, and cultivate first-class investment banks and investment institutions, according to the outline.
On March 13, the China Securities and Regulatory Commission said that it will closely monitor changes in international financial markets, strengthen the monitoring and regulation of the linkage between domestic and foreign markets and spot and futures markets, consolidate and enhance the construction of the stability mechanism with Chinese characteristics, and promote listed companies in improving governance and enhancing value, further increasing the stability of the market.
The CSRC also called for the issuance and implementation of a plan for deepening the reform of the ChiNext technology board, accelerate the optimization of the refinancing mechanism, further expand the exit channels for private equity and venture capital funds, encourage more social capital to invest early, in small amounts, for the long term, and in hard technology to better stimulate the vitality of technological innovation.
Moreover, the CSRC said it will strengthen regulatory enforcement, focusing on major cases, serious offenses, and key areas. It will severely crack down on illegal activities, such as financial fraud, market manipulation, insider trading, and false statements, improve the legal framework of the capital market, continuously enhance the investor protection system, and increase the effectiveness and deterrent power of regulatory enforcement.