Press Conference by NPC members and CPPCC representatives from CSRC and affiliated organizations was held on 10th March, 2013. Song Liping, member of the 12th NPC, President and CEO of Shenzhen Stock Exchange spoke to the press about focal issues of the market. The following is an abstract of her remarks.
SZSE maintains its commitment to serving the real economy. SZSE made remarkable achievements in driving forward development of the multi-tiered capital market in the past five years. By the end of 2012, SZSE had 1540 listed companies with total market capitalization of 7.2 trillion RMB yuan. The number of listed fund products reached 228 and total asset under management was worth 174 billion RMB Yuan. We also successfully launched cross-market and cross-border ETFs in 2012. There were 372 bonds with a nominal value of 163.4 billion RMB Yuan listed on SZSE. The ChiNext market has witnessed sizable expansion. The 355 listed companies were concentrated in emerging industries of strategic importance including cultural, creative industry and the Internet. They have become a major force in promoting strategic economic restructuring and galvanizing private investment and entrepreneurship.
The most important lesson learned from the international financial crisis in 2008 is for financial services to return to basics and common sense. If we separate ourselves from the real economy and investors’ needs, we will waste opportunities of lesson-learning brought by the financial crisis. In line with the overall requirement raised in The Report on the Work of the Government, SZSE will carry out a number of projects to enhance market fundamentals. We will continue to organize the special investor relations project named Know Your Shareholders, reinforce the special project against over speculation on new shares in coordination with IPO reforms, develop a Home of SMEs as an SME-service platform, build a Supermarket of Funds, consolidate the Innovation Platform for Fixed Income Products and improve information access for Qualified Foreign Institutional Investors (QFIIs).
Along with the improvement of services, SZSE will continue to deepen institutional reforms, constantly improve systematic development and promote the healthy growth of the capital market in line with the overall arrangements of the central government and the CSRC.
In terms of mergers and acquisitions (M&A), we suggest that amendments be made to legal provisions concerning M&A and improve approval efficiency as soon as possible. SZSE-listed companies tend to be small in size. If we define restructuring only by ratios against total assets or income, it will not be fair to require restructuring projects of all sizes to go through the same review process of the Restructuring Committee. Amendments are necessary. At the same time, the reviewing procedures for M&A within the same industry should be simplified, while cross-industry M&A reviews should maintain its rigor and scrutiny.
As to the development of ChiNext Market, we suggest sector-coverage be expanded and relevant provisions be amended. Taking many practical factors into consideration, such as the impact of financial crisis, we believe that there is room for improvement in ChiNext Market IPO criteria and relevant provisions should be amended for this purpose.
In view of investor protection, we recommend cancellation of prerequisites of administrative procedures before civil proceedings, expansion of acceptance scope of the securities-related civil cases and drafting of judicial interpretation of market manipulation crimes.
The liberalization of interest and the aging society form rigid demand for the bond market and offer strategic opportunities for us to develop the bond market and adjust the long existing structural imbalance in China’s capital market. SZSE will treat the bond market as the “Hope Project” inChina. We will learn from the successful experience of the inter-bank bond market, make full use of the unique advantages of the exchange market and set up a fixed-income product innovation platform. Also we recommend that the State Council issue regulation concerning corporate bonds management to fill up legislative blankness.
Faced with challenges from the internet-based information dissemination, SZSE has organized a special taskforce and developed a text-mining prototype to detect market manipulation by false statements. At the same time, we recommend that the Supreme People's Court and the Supreme People's Procuratorate issue judicial interpretations as soon as possible, clearly defining market manipulation and improving efficiency of punishment.
In the reform of the B shares, problems should be resolved under the framework of existing laws and regulations. According to plans submitted by the candidate companies, we will move ahead with each when it meets all necessary conditions.
For the restructuring of exchanges, SZSE will first of all improve its governance structure. We are preparing to set up board of supervisors. Such work will be steadily pushed forward. SZSE will also study the experience of overseas markets in restructuring and listing over the last decade. We will continue to strengthen services to SMEs and small-cap investors.