Wu Qing: Agreed to allow 20 securities firms and fund companies to apply for central bank swap facilities, further deepening capital market reforms

On the 18th, Wu Qing, Chairman of the China Securities Regulatory Commission, stated at the 2024 Financial Street Forum Annual Meeting that approval has been granted for 20 securities and fund companies to apply for central bank swap facilities, further deepening capital market reforms, and formulating plans to deepen capital market reforms.

He mentioned that guiding financial institutions to continue increasing financial supply, fully supporting the economic recovery trend; focusing on both supply and demand, clearing obstacles in credit distribution; leveraging the role of banks as the main force in financing, where "good lending," "willing lending," and "daring lending" are key.

Wu Qing stated that legal and compliant reduction of holdings is allowed, but illegal and circumventing reductions will be strictly cracked down upon. For recent discoveries of violations, repurchases and handing over price differences have been requested, holding individuals accountable. Addressing pricing in primary and secondary markets, investor protection, and other issues, using typical cases as a starting point to achieve practical results.

Wu Qing mentioned accelerating the implementation of the "six merger measures" and promptly introducing a batch of typical cases. The Securities Regulatory Commission will steadfastly continue to promote comprehensive institutional opening of markets and institutions, broaden channels for overseas listings, encourage foreign institutions to invest and expand business in China. Further enhancing policy stability, transparency, and predictability, allowing all types of funds to develop better and better.

The full speech is as follows:

Respected Secretary Yin Li, Mayor Yin Yong, Director Xiu Ling, Chairman Xiao Dong, Vice Director Wang Jiang, President Gong Sheng, Director Yun Ze, President Fu Hua, Director He Xin, distinguished guests, ladies and gentlemen:

Good morning everyone! I am delighted to participate in this Financial Street Forum. Currently, the global economic trade, geopolitical situation is complex, with frequent conflicts and significant risks. Only by upholding mutual understanding and respect, strengthening macro policy coordination and trust, enhancing industrial division and cooperation, deepening financial cooperation and opening up, can we solve development challenges and bridge the trust gap, injecting more certainty into the uncertain global economy. This forum, with the theme of "trust and confidence," is of great practical significance.

Since the beginning of this year, facing a complex and severe internal and external environment, under the strong leadership of the Central Committee of the Communist Party of China, the overall operation of the Chinese economy has remained stable and made progress, promoting high-quality development solidly. The Third Plenary Session of the Twentieth Central Committee of the Party has made comprehensive arrangements for further deepening reform and advancing China's modernization, injecting strong momentum into long-term economic improvement. Recently, various parties have resolutely implemented the spirit of the Central Political Bureau meeting on September 26, launching a series of policy "combinations" that have effectively boosted market confidence. We believe that with the accelerated implementation of key reform tasks, the continuous introduction of a package of incremental policies, and the sustained efforts of existing policies, the foundation for the continuous improvement of the Chinese economy will become more solid and steady The capital market plays a unique and crucial role in promoting the formation of innovative capital, assisting in industrial transformation and upgrading, improving social wealth management, and stabilizing social expectations. The China Securities Regulatory Commission (CSRC) will resolutely implement the spirit of the Third Plenary Session of the Twentieth Central Committee and the Central Political Bureau meeting, closely focus on the high-quality development of the capital market, strengthen the foundation, enhance supervision, prevent risks, effectively leverage the functions of the capital market, and better serve the overall economic and social development.

First, further strengthen the foundation for coordinated development of investment and financing. Investment and financing are two sides of the same coin, mutually reinforcing each other. Firstly, achieve an overall balance in quantity. On one hand, accelerate the implementation of guidance on the entry of medium and long-term funds into the market, vigorously develop equity public funds, adopt targeted measures to address the bottlenecks in the entry of medium and long-term funds into the market, and establish a policy system that supports "long-term money, long-term investment." The CSRC has approved 20 securities fund companies to participate in the convenience tool swap, which will introduce incremental funds to the A-share market. Furthermore, we will actively cooperate with the People's Bank of China to implement policies on stock repurchase and increased holdings through re-lending, which will bring in additional funds to the A-share market.

On the other hand, we will promote the implementation of various measures to achieve the five major tasks in the financial sector. We will further improve the coordination mechanism for the development of the primary and secondary markets, making the market financing scale and pace more scientifically reasonable.

Secondly, achieve continuous improvement in quality. Seizing the opportunity to enhance the quality of listed companies, we will guide and supervise listed companies to improve corporate governance, enhance transparency, increase dividends and buybacks, implement market value management responsibilities, continuously enhance investment value, and create long-term returns for investors.

Thirdly, achieve effective balance of rights and responsibilities. Recently, the market has been concerned about shareholder reductions. Based on objective data, there has been no "massive reduction" or significant illegal reduction of holdings by listed companies in the past year or since late September. For individual cases of illegal reductions, the CSRC and stock exchanges have taken immediate measures and imposed strict penalties. While supporting normal shareholder reductions as a shareholder right, illegal reductions and circumvention must be resolutely dealt with, including mandatory buybacks, price differentials, and corresponding responsibilities.

Next, in response to the shareholding, funding, and information advantages of major shareholders and actual controllers of listed companies, we will strengthen supervision throughout the entire chain of issuance, listing, information disclosure, share reduction, and delisting, impose necessary constraints on the behaviors of "key minorities" such as major shareholders, and effectively safeguard the legitimate rights and interests of small and medium investors, making financing more standardized and investments more secure.

Second, further support the development and growth of new productive forces. We will focus on supporting high-quality innovative enterprises, enhance institutional inclusiveness and adaptability, reform and optimize the issuance and listing system, implement the newly released "six merger and acquisition rules" effectively, and promptly introduce a batch of typical cases. We will improve equity incentive systems, effectively stimulate entrepreneurial spirit and innovation vitality of talents, lead and drive various advanced production factors towards the development of new productive forces. We will focus on nurturing and strengthening patient capital, comprehensively utilize various tools such as stocks, bonds, and futures, improve policies supporting venture capital and private equity investment in "fundraising, investment, management, and exit," and guide better investments in early-stage, small-scale, long-term, and hard technology projects Enhancing professional service capabilities, urging industry institutions to improve their capabilities, and better leveraging the roles of value discovery, risk pricing, trade matching, value-added services, etc. in promoting technological, industrial, and business model innovation to help the development and growth of high-quality innovative enterprises.

Third, further comprehensively deepen capital market reforms. We are studying and formulating a plan to further comprehensively deepen capital market reforms in accordance with the deployment of the Third Plenum. We will adhere to the direction of marketization and rule of law, deepen comprehensive reforms in capital market investment and financing, improve the institutional mechanisms to promote the high-quality development of listed companies and enhance the intrinsic stability of the market. Focusing on key and difficult issues that restrict the market functions such as pricing in primary and secondary markets, investor protection, etc., we will drive institutional improvement through typical cases. Strengthening reform coordination, grasping the timing and effectiveness, ensuring that all reform measures are operational, implementable, and predictable, and achieve practical results.

Fourth, further shape a good market ecosystem. Implementing regulatory requirements with "sharp teeth and edges," cracking down on financial fraud, fraudulent issuance, market manipulation, illegal reduction of holdings, etc., effectively safeguarding the market's "three public" interests. Strong regulation is not about being overly harsh, the key is to promote strong fundamentals and foundations through effective and lawful regulation, ensuring that all parties in the market fulfill their responsibilities and receive their due, and promoting a strong foundation. While strengthening regulation, we encourage the practice of China's unique financial culture of "five dos and five don'ts," urging listed companies, industry institutions, etc., to uphold the spirit of the rule of law and integrity, fulfill their contractual obligations and entrusted responsibilities, nurture a culture of respecting and rewarding investors, and create a favorable "soft environment" for the stable and healthy development of the capital market.

Dear guests, dear friends!

Openness is a distinct symbol of Chinese-style modernization, and foreign investment is an important participant and builder of China's capital market. The China Securities Regulatory Commission will steadfastly continue to promote comprehensive institutional opening of markets, institutions, and products, deepen the interconnection between domestic and foreign markets, expand overseas listing channels, and encourage and support more foreign institutions to invest and expand their business in China. We will further enhance the stability, transparency, and predictability of policies, striving to make all kinds of funds "willing to come, stay, and develop well."

Finally, I sincerely wish this forum great success!