Recently, the China Securities Regulatory Commission held a number of promotion meetings closely related to the work of maintaining the stability of the capital market, releasing measures from aspects such as promoting research and visits to listed companies, improving the quality of listed companies, guiding more medium and long-term funds to enter the market, and severely cracking down on illegal activities such as market manipulation. A strong policy signal. At the same time, the China Securities Regulatory Commission has also actively responded to key issues such as stock pledge risk resolution and securities lending business supervision that the market has recently focused on, and continues to promote the smooth operation of the capital market.
Promote listed companies to enhance their investment value
On February 5, the Listed Division of the China Securities Regulatory Commission convened two special symposiums to promote listed companies to enhance investment value and support mergers, acquisitions and reorganizations of listed companies, in order to further promote listed companies to improve their growth and ability to return investors, and make good use of mergers and acquisitions and reorganization tools to increase investment. Provide policy direction in terms of value and other aspects.
Among them, the special symposium on promoting listed companies to enhance investment value emphasized that listed companies are the “basic”, “ballast stone” and “top students” of the national economy, and the source of investment value in the capital market. They must be honest, trustworthy, truthful, transparent, and regulated. By focusing on the main business, the company’s growth will be improved, its ability to reward investors will be enhanced, and investors will be able to share more of the company’s development results.
The meeting also “delineated” the key points for the next stage of work: first, attaching great importance to improving the investment value of listed companies. The second is to establish an internal long-term mechanism for improving investment value and strengthen listed companies’ own thinking on improving the investment value of listed companies. The third is to make full use of the “toolbox” to enhance investment value in accordance with the law, including share buybacks, major shareholder increases, regular dividends, mergers and acquisitions and other market tools. The fourth is to proactively strengthen communication with investors and effectively improve investor expectations through performance briefings, road shows, etc.
At the symposium on supporting mergers, acquisitions and reorganizations of listed companies held on the same day, the listed company of the China Securities Regulatory Commission said that overall, the market-oriented reform of mergers, acquisitions and reorganizations has achieved positive results, industrial mergers and acquisitions have gradually become the mainstream of the market, and a large number of listed companies have improved their quality through mergers, acquisitions and reorganizations. Increase efficiency, become better and stronger. In the next step, we will scientifically coordinate the relationship between promoting development, strengthening supervision, and preventing risks, take multiple measures to activate the M&A and reorganization market, and support the implementation of outstanding typical cases to achieve results.
Previously, the China Securities Regulatory Commission also held a meeting to promote the work of visiting listed companies. According to disclosures, as of February 4, 20 provinces (autonomous regions and municipalities) across the country had carried out on-site visits, and related work was intensively advanced. In response to the demands raised by the visited listed companies involving tax policies, financing, land, import and export, intellectual property protection and other aspects, a work ledger has been formed for each company and item by matter, and is being studied and resolved based on the actual situation.
Continue to increase long-term capital entry into the market
Since 2024, in the face of the widely fluctuating A-share market, increasing the entry of medium and long-term funds into the market and enhancing the inherent stability of the market have become the focus of the securities regulatory authorities.
The National Standing Committee held on January 22 proposed “increasing the entry of medium and long-term funds into the market.” The meeting emphasized the need to further improve the basic system of the capital market, pay more attention to the dynamic balance of investment and financing, vigorously improve the quality and investment value of listed companies, increase the entry of medium and long-term funds into the market, and enhance the inherent stability of the market.
On January 23, when the China Securities Regulatory Commission held an enlarged meeting of the Party Committee, it further stated that it would deepen the reform of the investment side, increase the entry of medium and long-term funds into the market, promote the dynamic balance of investment and financing, and continuously enhance the inherent stability of the stock market. Actively cultivate a healthy capital market culture.
Entering February, regulatory authorities have also repeatedly mentioned content related to medium and long-term funds. On February 4, the China Securities Regulatory Commission Party Committee meeting proposed that various investment institutions should be encouraged and supported to increase countercyclical layout and guide more medium and long-term funds to enter the market.
Subsequently, on February 6, Central Huijin Investment Co., Ltd. announced that it had recently expanded the scope of its holdings of exchange-traded open-end index funds (ETFs), and would continue to increase its holdings and expand its holdings to resolutely safeguard the capital market. After the smooth operation, the spokesperson of the China Securities Regulatory Commission responded that it will continue to coordinate and guide various institutional investors such as public funds, private equity funds, securities companies, social security funds, insurance institutions, and annuity funds to enter the market with greater efforts, and encourage and support listed companies to increase their investment in the market. The large-scale repurchase and holding increase will introduce more incremental funds into the A-share market and make every effort to maintain the stable operation of the market.
Actively respond to hot issues such as “pledge” and “two integrations”
While promoting the investment value of listed companies and supporting the entry of incremental funds into the market, in the face of market concerns about margin financing and securities lending, stock pledges, and combating fraudulent issuance and financial fraud, the securities regulatory authorities have also implemented a “combination punch” of policies and continued to strengthen Supervision in relevant areas.
Focusing on the two financing businesses that are highly concerned by the market, the China Securities Regulatory Commission has made continuous statements in recent days. On February 6, a spokesman for the China Securities Regulatory Commission stated that three measures were proposed to further strengthen supervision of the securities lending business. First, the scale of new securities re-financing was suspended, and the current balance of securities re-financing was used as the upper limit. The number of new securities companies was suspended in accordance with the law. The scale and stock of securities refinancing have been gradually closed; secondly, securities companies are required to strengthen the management of customer trading behaviors, and it is strictly prohibited to provide securities lending to investors who use securities lending to implement intraday reversal transactions (disguised T+0 transactions); thirdly, they continue to increase In terms of supervision and law enforcement, the China Securities Regulatory Commission will crack down on the use of securities lending transactions to implement improper arbitrage and other illegal activities in accordance with the law to ensure the smooth operation of the securities lending business.
On the same day, a number of companies, including China Southern Asset Management and Guangfa Fund, issued announcements stating that they would strictly implement the relevant requirements of the Securities Regulatory Commission on the securities lending business, suspend the lending scale of new refinancing securities, and prudently and steadily promote the lending scale of existing refinancing securities gradually. to ensure the smooth operation of relevant businesses.
In fact, on January 28, the China Securities Regulatory Commission had already issued relevant measures to strengthen the supervision of the securities lending business: first, it comprehensively suspended the lending of restricted stocks; second, it adjusted the application for market-based securities lending from real-time availability to the next day. Available to limit the efficiency of securities lending. Due to factors such as system adjustments, the first measure will be implemented from January 29, and the second measure will be implemented from March 18.
According to the latest data disclosed by the China Securities Regulatory Commission, since the implementation of the relevant system, the balance of securities lending has dropped by 24% and has now dropped to 63.7 billion yuan, accounting for 0.1% of the circulating market value of A-shares.
Regarding the issue of stock pledge risks, the China Securities Regulatory Commission responded that according to data from the Shanghai and Shenzhen stock markets, the total amount of forced liquidation of stock pledge defaults this year is 27.4032 million yuan, which accounts for a small proportion of the daily market turnover. Since 2018, the China Securities Regulatory Commission, together with relevant departments, has continued to promote the resolution of stock pledge risks, and the overall risk of stock pledges in the Shanghai and Shenzhen stock exchanges has dropped significantly. As of February 2, the proportion of stock pledged market value in the two cities’ total market value has dropped from 10.51% at the peak in 2018 to 3.38%, and the balance of pledged financing has dropped from 2.69 trillion yuan to 1.59 trillion yuan. The largest shareholder of listed companies The number of companies with a pledge ratio exceeding 80% dropped from 702 to 227.
As for illegal activities in the capital market, since February, the Supreme People’s Procuratorate and the China Securities Regulatory Commission have successively stated that they maintain a “zero tolerance” attitude towards securities and futures illegal crimes, and severely crack down on major illegal activities such as market manipulation, malicious short selling, insider trading, and fraudulent issuances in accordance with the law. .
The China Securities Regulatory Commission stated that manipulating the market for malicious short selling has seriously eroded people’s “money bags” and has become the opposite of all investors, disrupting the normal rhythm of the healthy and stable operation of the stock market. The China Securities Regulatory Commission will maintain a high-pressure posture of “zero tolerance” and crack down resolutely, so that those who dare to illegally manipulate and malicious short sellers will “go bankrupt and sit in jail.”
“Illegal activities such as market manipulation, financial fraud, and fraudulent issuances have seriously harmed the securities and futures markets and are the key to distorting market operations.” Tian Lihui, dean of the Institute of Financial Development at Nankai University, believes that the recent successive announcements by regulatory authorities have unleashed a resolute crackdown Signs of illegal and criminal behavior in securities and futures. Since the beginning of this year, the supervision of the capital market has shown a trend of being strict, tight and practical, which is of great significance to the long-term development of the capital market, the protection of investors’ rights and interests, and the improvement of market credibility.