The 2008 Midyear Conference on National Securities & Futures Regulation, held recently by the China Securities Regulatory Commission (CSRC) in Beijing, comprehensively summarized the capital market’s reform and development as well as the securities and futures regulation in the first half of 2008, systematically analyzed the situation and tasks confronting the market development, and deployed the capital market’s reform and development in the second half. Party Secretary and Chairman Shang Fulin of the CSRC stressed that regarding the crucial reform and development of the capital market, we should, under the guidance of the Scientific View on Development, in accordance with the deployment of the CPC Central Committee and the State Council on the economic work in the second half, attach importance to the establishment of fundamental systems, the steady reform and innovation, the improvement of the capital market system and the supervision over the market, solve problems by deepening reform, and develop a sound capital market with unified understanding and full confidence.
Shang pointed out that faced with the complicated market and the unexpected snow storm and earthquake this year, the securities and futures regulatory system had, led by the 17th CPC National Congress, under the guidance of the Scientific View on Development, followed the deployment at the Conference on National Securities and Futures Regulation at the beginning of the year and made new achievements by overcoming difficulties and working step by step. Firstly, we had actively participated in the disaster relief and spared no efforts in supporting the reconstruction to safeguard the securities and futures trading. Secondly, we had perfected the trading and issuance systems, adjusted the financing structure as well as the supply and demand. Thirdly, we had reinforced the supervision over listed companies, laid solid foundation for the securities industry and steadily established fundamental systems. Fourthly, we had steadily developed the futures market and continuously integrated the futures market with the spot market and the brick-and-mortar industry. Fifthly, we had strengthened legal systems and cracked down on violations of laws and regulations on the capital market. Sixthly, we had intensified the information security of the securities and futures industry in an all-round way. Seventhly, we had vigorously guided public opinions and made efforts in letter visits and security work. Eighthly, we had continuously constructed a clean and honest administration, and bred many cadres for the securities and futures regulatory system.
Shang said at the conference that with the turbulence of the international financial market and the changes of domestic macro economy in 2008, some new difficulties occurred in the capital market despite its soaring growth over the past two years, with great market consolidation and declining market evaluation on the whole. However, generally speaking, the foundation and impetus of the sound capital market hasn’t seen any major changes. The macro economic foundation remains optimistic, and the preliminary conditions for the fundamental systems are formed. It is urgent to establish a sustainable capital market. The problems arising from the reform and development can only be gradually solved through continuously deepening the reform. Besides, we should, by taking advantage of opportunities, correctly grasp and analyze current market situation on the whole, and stand up to all challenges.
According to Shang, while planning the economic work of the second half, General Secretary Hu Jintao of the CPC Central Committee and Premier Wen Jiabao pointed out that we should firmly promote the Reform and Opening-Up, and do our best to maintain a steady and rapid economic growth for the capital market. To do a good job in the second half and the next period, we should, under the deployment of the CPC Central Committee and the State Council, focus on structure and mechanism improvement as well as risk prevention to better the supervision based on a comprehensive knowledge of internal and external changes of the capital market. We should pay more attention to economy and finance both at home and abroad. In addition, emphasis should be put on improving the market’s internal stability mechanism and the legal governance over the market, steadily promoting the financial innovation, preventing market risks, perfecting structure and development quality of the market as well as adopting innovative regulatory measures.
While specifying the work of the second half, Shang said that under the guidance of “developing by consolidating foundation, deepening reform and opening-up, increasing functions, and intensifying supervision”, we should devote to the following aspects based on the deployment of the supervision conference at the beginning of this year:
Firstly, we should vigorously adhere to the Scientific Outlook on Development, understand the importance and urgency of developing the capital market, and solve problems in the market-oriented reform. Moreover, a long-and-short-term planning should be worked out, with more efforts in the fundamental systems as well as senses of mission and responsibility.
Secondly, all-out efforts should be made to safeguard the market stability. The smooth running of the capital market should, with the awareness of general situation and responsibility, be ensured by stabilizing all kinds of mechanisms, safeguarding the securities and futures information system for any hidden risks and perfecting the emergency scheme.
Thirdly, the market should be continuously expanded by boosting innovation. Specifically, the price inquiry system of new stocks should be perfected to give the market-oriented pricing mechanism into full play. Efforts should be made to breed multi-level institutional investors to attract all kinds of long-term capital. Moreover, bottleneck problems in the bond market should be solved to optimize the market financing structure. Efforts should also be made in the market innovation, the market system and the healthy development of market participants. Especially, we should optimize and classify existing futures products, and speed up the listing of new varieties as well.
Fourthly, the supervision should be intensified by legal governance over the market. Specifically, efforts should be made to amend the “Law of the People's Republic of China on Securities Investment Fund”, draft the “Futures Law” and promulgate the “Management Rules on Listed Companies' Supervision”. Meanwhile, with the deepening of the reform on administrative examination and approval system, we should accelerate the amendment to the “Rules of the China Securities Regulatory Commission for the Implementation Procedures for Administrative Licenses”. The law-oriented administration ability should be enhanced by strict law enforcement and cracking down on market manipulation, insider dealing and interests transfer as well.
Fifthly, initiatives should be taken to provide good air for public opinions. We should establish a timely and efficient communication mechanism with news media, by news release and issuance of significant policies and hot issues concerning the capital market’s reform and supervision. Besides, upon active cooperation with media departments and public security departments, actions should be promptly taken to crack down on rumors and fraudulence on the market.
Sixthly, the anti-corruption education should be popularized for cadres. Specifically, the personnel concerned should be prohibited from purchasing and selling shares as well as leaking sensitive inside information, and penalties should be imposed on any violation of laws and regulations. Meanwhile, the supervisors’ ability in handling difficult problems and complicated situations are supposed to be enhanced by learning hard, with the supervisor personnel system to be reformed.
Upon summary at the conference, Vice Secretary of the CSRC Party Committee and CSRC Vice Chairman Fan Fuchun proposed some specific requirements. The first is to deepen our understanding. We should, with senses of mission and responsibility, adhere to the judgments and decisions on the economic and financial situations made by the CPC Central Committee and the State Council as well as the CSRC Party Committee’s deployment based on the current market situation, and earnestly implement all the requirements at the conference. The second is to arouse our spirit. With our high morale and firm resolution, we should face challenges and overcome difficulties in the reform and development. The third is to reinforce implementation. By disassembling tasks and formulating relevant implementation plans, we should synchronize and rationalize all the tasks including maintaining the stability, expanding the market, improving the supervision, guiding the public opinions as well as strengthening the self-construction. The fourth is to learn hard. Cadres at all levels should set good examples in learning, and all units and departments should establish sound cadre assessment systems to adjust supervision concepts, perfect supervision methods and upgrade supervision level, thus making it more pertinent, effective and prospective. The fifth is to maintain stability. We should carry out the CSRC Party Committee’s arrangements for stability, by assigning tasks to specific personnel, solving the sprouting disputes and preventing accidents, group events and other malignant incidents.
At the conference, excellent organizations and individuals from the securities and futures regulatory system were awarded for their courage and performance in the snowstorm and earthquake relief work. In addition, the attendees also listened to the reports made by relevant specialists of the People’s Bank of China, the National Bureau of Statistics of China and the Central Commission for Discipline Inspection of the Communist Party of China (CPC). Attending the conference were CSRC officials Li Xiaoxue, Gui Minjie, Zhuang Xinyi, Yao Gang, Liu Xinua, Jiang Yang and Zhu Congjiu, representatives from CSRC departments, agencies, securities and futures exchanges, securities depository and clearing corporations, securities investor protection fund companies, futures margin monitoring center, futures and securities associations, securities and futures institutions as well as the representatives from relevant departments of the CPC Central Committee, the State Council and related news release units.
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