The China Securities Regulatory Commission (CSRC) released four documents to strengthen market supervision of the stock market, aimed at effectively enhancing the quality of listed companies and better safeguarding investor interests. Experts said the move shows the regulator’s commitment to taking swift action to create a fairer marketplace for smaller investors, conducive to sustaining the recent rally in the A-share market. The documents detailed measures on getting listed and issuing stocks, intensify the oversight of listed companies, enhance the expertise of securities firms and mutual fund companies, and crack down on instances of misconduct and corruption among CSRC officials.
Li Chao, Vice Chairman of the CSRC, said that “on the one hand, the guidelines focused on improving the quality of listed companies and better protecting the legitimate rights and interests of investors, and further refined measures to strengthen market supervision.” On the other hand, Li said the guidelines also made comprehensive arrangements to strictly enhance the CSRC’s internal management to strengthen self-scrutiny and confront tough issues head-on. Specific measures include adjusting the pace of new stock issuance in accordance with the secondary market’s capacity to absorb new shares, raising the financial listing criteria of some market sections, and increasing on-site inspections of IPO applicants. Yan Bojin, Director of the CSRC’s Department of Public Offering Supervision, said the Commission will guide the Shanghai and Shenzhen bourses to moderately tighten the financial listing criteria of certain market sections so that companies at different stages of development can get listed in suitable sections. Yan, who is also the Commission’s Chief Risk Officer (CRO), said on-site inspections of the companies under IPO reviews will also be significantly increased to cover no less than one-third of the applicants. Activities of fraudulent issuances and financial frauds detected during on-site inspections would be strictly punished, even if the companies withdraw their listing applications, Yan said.
The new guidelines also encourage listed companies to increase dividend payouts and strengthen market value management while cracking down on big shareholders reducing holdings illegally, the China Daily reports.
