China to improve capital market governance
China's top securities regulator plans to improve governance of the capital market as part of major tasks for 2020.
The China Securities Regulatory Commission (CSRC) said it would work to develop a capital market with more standardized rules, transparency, openness, vitality and resilience, while adhering to the supply-side structural reform in the financial sector as specified in the statement released after the country's annual central economic work conference.
Reform of the ChiNext, another NASDAQ-style board of growth enterprises preceding the sci-tech innovation board, will be advanced and the registration system will be piloted. The CSRC called for innovation in products and tools in the bond market, a larger supply of futures and options products, as well as further development of private equity investment.
The country will take multi-pronged measures to improve the quality of listed companies. More efforts should be made to defuse and fend off risks in key areas including stock pledges, bond defaults and private equity funds to win the tough battle against major financial risks.
The opening up of the capital market will be realized while oversight will be enhanced to ensure stable capital market growth. China has unveiled new rules on piloting separate listings of listed companies' subsidiaries to help expand financing channels, according to the China Securities Regulatory Commission (CSRC).
The new rules specified qualifications for listed companies to spin off and list their subsidiaries, which require them to have been listed for at least three years and be profitable for three consecutive fiscal years. The listed companies should disclose relevant information and apply for review from the board and the shareholder meeting before spinning off, according to the new rules.
The listed companies are also required to hire intermediate agencies including independent financial consultants, law firms and accounting firms to assess and supervise the separate listings.
The CSRC vowed to improve the quality of listed companies by supporting them in listing their business units, as well as to tighten oversight and crack down on unlawful practices.
Meanwhile,
China
is expected to attach greater importance to capital market reforms next year and focus on improving institutional arrangements to boost the quality of listed firms as a key part of its pursuit of high-quality development, officials and analysts said.
Their comments came after the tone-setting annual Central Economic Work Conference concluded on Thursday and the meeting prioritized capital markets in financial system reform. This signaled the critical role of capital markets in serving the nation's real economy.
The meeting outlined specific reform measures, including refining fundamental institutions of capital markets, improving listed firm quality, and completing delisting mechanisms, according to Xinhua News Agency.
These requirements are reflected in the recently introduced action plan to improve the quality of listed firms, the top securities watchdog said.
"We will promote the improvement in listed firm quality to lay the foundation for elevating the adaptability, competitiveness and inclusiveness of capital markets," Yan Qingmin, vice-chairman of the China Securities Regulatory Commission, said at a forum.