Capital market reforms should focus on the market's affordability
Capital market reforms should focus on the market's affordability
Xiao gang has been chairman of the China securities regulatory commission for a full year. The Shanghai composite index closed at 2,278.40 on the day before it was announced, down 11.18 per cent from a year earlier to 2023.67. The capital market has been "reforming the wind" this year, but the A shares have not come out of the bear market "quagmire", so, will it be like some people are worried about "reform without A bull market"?
One is regulatory transformation. Xiao gang issued the "supervision law enforcement: the cornerstone of the healthy development of capital market" in "seeking truth", and proposed "more respect for market objective law, reversing the tendency of 're-examination and supervision'." We will transform the main business from reviewing and approving the examination and approval to regulatory law enforcement. We will focus our operations on the former and the post-mortem transfer of supervision. Since then, he has quoted "five fingers theory", saying "the thumb is the investor, the boss", and "the SFC is littlefinger, the smallest".
The second is to protect investors' rights. Xiao in the People's Daily published to protect minority investors is to protect the capital market, points out that this "is not only the inherent requirement of healthy capital market, is also an effective way to maintain social fairness and justice." At the end of 2013, the general office of the state council released the opinions on further strengthening the legal protection of small and medium-sized investors in capital markets, and was hailed as the top-level design for protection of small and medium-sized investors.
Third, strengthen supervision and enforcement. "We will resolutely investigate illegal activities such as fraud issuance, illegal disclosure, insider trading, manipulation of the market, and rat stock market, and increase the cost of illegal violations," xiao said. In the past year, the fines issued by ping an and everbright securities have been unprecedented in the domestic securities market, and have been a deterrent to illegal activities.
Fourth, promote the reform of the issuance system. In the meantime, the IPO has been rebooted, and the reform of the new issue system has been carried out in various aspects, in particular, it has strengthened the credibility obligation of the issuer and its controlling shareholders. In addition, the aim of "advancing the reform of the registration system for stock issuance" is clear. Xiao said in the recent "two sessions" that "the registration system will take shape this year".
Mr Xiao's new reforms have been intensified, making 2013 a year of reform in China's capital markets. In the past year, the performance of the a-share board has been poor, with the Shanghai index rising at its highest level to 2344.89, falling to 1849.65, and is now struggling close to the 2,000 mark. Although chinext has gained more than 70 per cent over the past year, the structural bull market has been local and A shares have not been labelled A bull market.
The reform of capital markets has yet to be Shared by investors, and it does not mean that "there is no bull market for reform". A shares have not yet emerged from the bear market and have not become the "barometer" of China's economic development. It shows that the task of reform is arduous and challenging, and the strength and depth of reform are still not fully in place. Reform has a process that cannot be achieved overnight. It needs to be perfected in practice. The new problems encountered by IPO reform reflect this.
The current "reform without A bull market" shows that the reform of a-share has yet to continue to overcome difficulties and pass through the pass. Xiao gang proposes several solutions to the sound securities civil compensation mechanism that small investors care about. For example, setting up the risk management and compensation system for listed companies to reduce the potential losses of small and medium-sized investors. This is the indispensable link of the strict delisting system, but it remains to be solved. The resistance to the reform of the market system is not small, and if it does not hit this "hard bone", it will inevitably affect the healthy development of the a-share market and even the process of reform in other areas.
Mr Xiao proposed a further reform of the market this year. On the basis of protecting investors' rights and interests, it is important to establish the effective selection of A shares to improve the efficiency of capital market resource allocation.
"Reform is not A bull market" is A misreading. Only reform will release positive energy, energize the market and solve the deep-seated problems that beset the development of the a-share market and boost investor confidence. Xiao also offered to "master or balance the strength of reform and the extent to which the market can afford it." This is indeed a challenge for the SFC."
Thus, capital market reform depends on courage and wisdom. The reform should also focus on the tolerance of the market, and the speed and pace of reform should be grasped to avoid excessive volatility caused by market immaturity.
