Deepen Reform, Transform Functions and Improve Work Style...

2021-01-08 中國證券監督管理委員會

Since the Party’s 「mass line」 education activities entered into the stage of rectification and rule-making, the CSRC’s Party Commission has adhered to resolving outstanding issues as practical actions to win people’s trust, promote administrative streamlining, decentralization and regulatory transition with the determination and courage to overcome difficulties, promote reform and work through new achievements of work style development, and strive to build a regulatory body satisfactory to the people.

  

Promoting major reforms in capital markets

  

Deepening the IPO system reform. In order to implemente the requirement of the Third Plenum of the 18th CPC Congress on 「promoting the reform towards a registration-based IPO system」 and advance the IPO system reform in a proactive manner., the CSRC has promulgated the Opinions on Further Promoting the IPO System Reform that straightens out the relationship between government and market in new share issuance, highlights the regulatory philosophy that information disclosure is of central significance, and ensures fulfillment of respective roles and responsibilities by all stakeholders. In the future, IPO regulation departments will focus on compliance review, leaving the value and risk of IPO companies to the independent assessment by investors and the market. In the next step of work, the CSRC will further adhere to the reform spirit and develop supporting measures for the reform towards a registration-based system of share issuance suitable to China’s reality.

  

Comprehensively implementing separate channels of M&As and reorganizations and tightening standards for backdoor listing. The CSRC has established three channels including exemption/fast track, normal track and prudent track, implement separate avenues for the review of M&As and reorganizations of listed companies according to the professional competence of financial advisors, operational standardization and credibility of listed companies, industrial policies and transaction types, conditionally relaxed administrative review, reduced review processes, and substantially increased review efficiency. For such problems as speculation on backdoor listing resources that have aroused strong complaints from the market, it is clearly stipulated that IPO standards should strictly apply to the review of backdoor listing, backdoor listing should be prohibited on the GEM board, and supervision on backdoor listing should be enhanced.

  

Promoting the development of multi-tiered capital markets in a proactive manner. The CSRC has broadened the scope of the New Third Board pilot program to nationwide implementation and improved relevant supporting measures, standardized the development of a regional equity market, advanced pilot activities of preferred shares in a proactive manner in order to satisfy both the diverse needs of financing and improving financial structure by different issuers and the diverse investment needs of investors. In addition, the CSRC has developed exchange-traded bond market in a proactive manner, expanded the pilot program for private placement bond of SMEs, and adopted a filing system for non-public issuance of private placement bond by non-listed SMEs, so as to broaden the financing avenues of SMEs. Together with the CBRC, the CSRC has jointly issued guiding opinions on the issuance of corporate bond by commercial banks to supplement capital, providing institutional standards for commercial banks to broaden their avenues of supplementing capital and promoting the development and interconnection of bond market. The CSRC has steadily developed the futures derivatives market in order to bring its functions under the service of real economy.

  

Proactively advancing administrative streamlining, decentralization and regulatory transition

  

Continuing to streamline and adjust items of administrative review and approval. In connection with the revision of the Securities Law and the enactment of the Futures Law, the CSRC has further summarized 66 items of administrative review and approval, and developed a plan for further canceling the items for administrative review and approval in the coming three years (2013~2015). Items of review and approval will be phased out as long as problems can be effectively resolved through the restraint of market competition, corporate self-governance, industry self-regulation or ex poste supervision. For matters that indeed require review, approval and filing, the procedures should be streamlined to increase efficiency through establishment of a complete electronic review system where conditions are ready.

  

Increasing regulatory transparency. The CSRC has convened regular press conferences on a weekly basis with full-time spokespersons officially assuming their responsibilities, made proactive use of the CSRC’s official website, and made public available matters of administrative permission , basis, conditions, quantities, procedures, durations, document catalogues, review and approval bodies and approval results, launched the CSRC’s official microblog, Wechat and "12386」 hotline, enhanced information availability and investor service, and ensured clear avenues for investors to report their requests.

  

Proactively advancing regulatory transition. The CSRC is conducting a survey on regulatory transition, shifting its regulatory functions from review and approval to regulatory enforcement and priorities of work from ex ante examination to concurrent and ex poste supervision.

  

Enhancing inspection, enforcement and investor protection

  

Vigorously enhancing inspection and enforcement. The CSRC has effectively fulfilled regulatory responsibilities of maintaining openness, fairness and justice of market order and protecting the lawful rights and interests of investors and especially small and medium-sized investors, vigorously enhanced inspection and enforcement, and swiftly and severely cracked down on securities and futures-related violations. Furthermore, the CSRC has promulgated the Opinions on Further Enhancing Inspection and Enforcement Activities, clearly defined the orientation of inspection and enforcement as the basic functions and key activities of the CSRC, improved the systems and mechanisms of inspection and enforcement, enriched inspection and enforcement resources, and comprehensively granted regional offices with the power to impose penalties. The CSRC has swiftly and severely investigated and penalized violations that seriously damage the interests of small and medium-sized investors such as fraudulent public offering and insider dealing including Wanfu Shengke case and Everbright Securities case. By this November, main enforcement statistics have surpassed the level of the previous year as a whole.

  

Vigorously enhancing investor protection. The CSRC has implemented the philosophy that protection of small and medium-sized investors is equal to the protection of capital markets and made the protection of the lawful rights and interests of small and medium-sized investors central to its regulatory activities by further improving information disclosure system to protect the rights of small and medium-sized investors to know, promulgating regulatory guidelines on cash dividend distribution of listed companies, developing differentiate minimum standards of cash dividend distribution in order to guide listed companies to reward investors in a proactive manner, promulgating financial futures investor appropriateness system and continuously improving investor suitability management, enriching investment channels and products, developing professional institutions offering services for small and medium-sized investors, and encouraging the development of low-risk products with relatively stable return suitable to small and medium-sized investors. In the next steps of work, the CSRC will promulgate opinions for protecting the lawful rights and interests of small and medium-sized investors in the securities and futures markets and create an institutional system for protecting the lawful rights and interests of small and medium-sized investors.

  

Deepening special campaigns to fight excessive spending and inefficiency

  

Conference and documentation. The CSRC has strictly controlled the number, duration and size of conferences, avoided holding unnecessary conferences, and opted for video conferences instead of site conferences whenever possible. Since this year, the conference expenses for CSRC departments have reduced by 42%. Efforts are made to reduce conference briefings and require that meaningless and unnecessary documents and briefings should not be distributed. In principle, all briefing and internal documents should be submitted in electronic format in order to substantially cut office cost.

  

Tightening 「three public」 expenditure. The CSRC has strictly executed public reception standards and controlled the total expenditure on receptions. Since this year, reception expenses reduced by 32% over the previous year. The CSRC has tightened public automobile management, and established an automobile use application system, standardized overseas business trips, and arranged and approved no more inspection delegations. The name list, expenditure and itinerary of all members of overseas delegations will be shown on the CSRC intranet for supervision.

  

Enhancing work efficiency. The CSRC has enhanced administrative public disclosure and regulatory transparency for the convenience of the masses, established an internal policy presentation and interpretation system, developed work procedures for inspection and supervision, implemented deadline requirements, and stipulated that 「within three months as of the date of acceptance of securities issuance application documents, decisions of approval, review suspension, review termination and rejection should be made according to statutory conditions and procedures」, with a view to increasing policy executive power.

  

Enhancing restraint on the operation of power. The CSRC has adhered to public consultation and feedback systems for major decision-making, established and improved rules for the filing and closing of securities and futures cases, as well as the trial and hearing of cases subject to administrative penalty, identified a "list of functions and powers」 of the CSRC departments and regional offices, and disclosed such information to the public in an appropriate form to receive public supervision.

  

The CSRC will continue focusing on issues to the greatest concern of the masses and the market, carry out reform in areas that are the most unsatisfactory to the masses and the market, expedite rectification with the spirit of hammering nails, innovate systems and mechanisms with the spirit of reform, enhance regulatory capabilities through work style development, earnestly maintain the market order of openness, fairness and justice, and protect the lawful rights and interests of investors and especially small and medium-sized investors for the healthy development of China’s capital markets.

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