China News Service:
Mr. Yan, you mentioned that many measures have already been implemented. In the next step, we are interested in what further measures will be introduced to play the role of the capital market and maintain the stability of the real economy? At the same time, we have been paying close attention to reforms in the capital market, especially the registration-based reform. Under the influence of the epidemic, will the pace and speed of the reforms change?
Yan Qingmin:
Since the epidemic outbreak, in accordance with the decisions and arrangements made by the Communist Party of the China Central Committee and State Council, the China Securities Regulatory Commission (CSRC) has unveiled a number of measures under the guidance of the Joint Prevention and Control Mechanism of the State Council to support the fight against the epidemic. Regarding the next measures to be taken, the CSRC will conscientiously implement the requirements of winning the people's war against the epidemic made by General Secretary Xi Jinping at the meeting of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee on Feb. 12. The CSRC will further play a role of the capital market to support the real economy. There are four aspects of measures.
First is fully ensuring the smooth operation of the market. The CSRC will track and analyze the performance of the market and take effective measures jointly with relevant departments to mitigate risks in key aspects such as equity pledges, margin trading, short-selling, and debt defaults to promote the smooth operation of the market. Adhering to the concept of promoting development and stability through reform, the CSRC has combined comprehensively deepening reforms with stable market operation, strengthened the construction of basic systems and continuously improved market resilience according to the requirements of the central economic work conference.
Second is continuing to strengthen the market function. The CSRC will continue to normalize IPOs and continuously meet the financing needs of the real economy. The CSRC will continue to deepen the market-oriented reform of mergers and acquisitions, enrich payment and financing tools, and better support industrial upgrading. The CSRC will actively give play to the financing of the stock exchange, innovate methods to increase the credit of private enterprises and debt financing tools, and reduce the threshold for the issuance of convertible bonds. The CSRC will increase the supply of commodities and financial futures and share options products, give full play to the function of the futures market, and solve the problems of high inventory, the shortage of raw materials, and price fluctuations in the products of enterprises. In the past few days, some enterprises have set good examples in the futures market. At the same time, the CSRC will optimize the system for inversely linking venture capital funds to reduce their holdings, play an important role in promoting the formation of innovation capital by private equity, and encourage more private equity and venture capital funds to invest in production and R&D enterprises working on reagents, drugs, and medical equipment in the field of epidemic prevention.
Third is effectively implementing the policies that have been introduced. On the basis of implementing the relevant policies made by the five ministries and commissions, the CSRC will further study the supporting measures and help entity enterprises to resume work and production. The CSRC will open "green channels" such as for financing approval reporting. For enterprises with registered and major production and management locations in Hubei province, enterprises' work in epidemic prevention and protection and fund-raising mainly used for initial launch, refinance, bond issue, acquisition and reorganization, the CSRC will give priority to audit and register for them. Last night, the CSRC published the revised refinancing rules on its website. We must implement the refinancing system to meet the capital needs of listed companies, further strengthen the capital strength of financial institutions such as security funds, give full play to our professional advantages, and provide financial services to enterprises in the areas affected by the epidemic.
Fourth is accelerating the deepening of reform and opening-up. The impact of the epidemic will be short-term, and our direction and determination to promote reform and opening-up will never change. Currently, the CSRC will focus on epidemic prevention and control, whilst deepening financial supply-side structural reforms, promoting the implementation of comprehensive deepening reform measures in the capital market, and better supporting the development of the entity economy. We will work on five aspects:
1. Building a multi-level capital market system. We will continue to promote innovation of the Sci-Tech innovation board system, stick to the positioning of the Sci-Tech innovation board, insist on encouraging more hardcore technology enterprises into the market, and at the same time promote the reform of the GEM and pilot registration system. We will promote the stable implementation of the reforms of NEEQ, coordinate and promote institutional innovation such as IPOs and the suitability management of investors.
2. Developing direct financing. We will continue to maintain the normalization of IPOs, implement the revised refinancing system, and promote financing inclusiveness.
3. Improving the quality of listed companies. We will improve the diversified exit mechanism, improve the quality of information disclosure, enhance the governing capacity of listed companies, and promote the survival of the strongest listed companies.
4. Promoting legal construction of the capital market. We will take the opportunity of implementing the new Securities Law, formulate and modify supporting regulations, optimize the governance system of the capital market, make full use of relevant laws and regulations, and significantly increase the costs of working illegally.
5. Expanding the source of medium and long-term funds. We will further increase the proportion of equity funds, expand the pilot work on publicly offered funds of investment and consultant services, encourage and support social security, insurance, pensions and other medium- and long-term funds coming into the market, and promote the implementation of the policy on publicly offered funds of tax-deferred personal pensions investment.
