Gui Minjie Governor Of The Shanghai Stock Exchange: Launching More Convenient, Flexible Trading Mechanism For Big-cap Blue Chips

Gui Minjie, Governor of the Shanghai Stock Exchange (SSE), said at the 4th SSE Legal Forum that the SSE would base itself on the orientation of organizing, serving, and managing the market and, with the spirit of reform, accelerate the construction of the SSE market. The key of its reform and construction would be in the two fields of the market system and the opening-up, which included the SSE’s four strategies, that is, making the blue chip market bigger and stronger, promoting the great-leap-forward development of the bond market, breaking through the development bottleneck of securities derivatives, and enhancing the openness of the market. And with regard to the strategy of breaking through the development bottleneck of securities derivatives, the preparatory work for individual-stock-option-related business lines, rules, techniques, and market mobilization had been ready after a long time of efforts, and the time had come and the conditions had been ripe for launching.

Gui believed that the construction of the market system mainly should focus on improving the product chain of the Exchange, innovating the trading mode, and establishing a complete market system with the core of the blue chip market and the coordinated development of the bond market, the assets management market, and the securities derivatives market. With regard to the opening-up, efforts should be made on adapting to the financial market’s development trend of opening to the outside world, speeding up the SSE’s opening-up pace, and actively participating in international competition. In a word, the above-mentioned two fields have included the four strategies of the SSE.

First, the SSE would, in accordance with the strategy of making the blue chip market bigger and stronger, build its blue-chip market into an important place for the major sections and resources allocation of a multi-leveled capital market. Therefore, the SSE should conform to the new requirements of the securities regulatory organizations in their regulatory transition, actively deal with the key reforms in the issuance and registration system, and research and improve the listing system, the refinancing system, the board switch system, and the delisting system, so as to do well in the reform-supporting preparations from the SSE’s level. Besides, the SSE would further optimize the system of direct channel for listed companies’ information disclosure and change the “Beforehand Examination” of the information disclosure regulation into “In-process Supervision and Aftermath Regulation”, so as to enhance the efficiency and the quality. Besides, it would research and put forward a more convenient and more flexible trading mechanism for big-cap blue chips, optimize the margin trading and securities lending system, reduce trading costs, and enhance trading efficiency, thus increasing the return and attraction of the blue chip market.

Second, the SSE would, in line with the strategy of promoting the great-leap-forward development of the bond market, grasp the favorable opportunity brought about by the accelerated construction of a standard and unified bond market and strive to expand the breadth and depth of the SSE bond market, so as to provide support for displaying the bond market’s function of direct financing, dispersing financial risks, and increasing investment tools. Therefore, the SSE would further follow inherent characteristics of bond products and the basic principles of the bond market, optimize the bond trading mechanism, and improve the bond business rules system, so as to provide convenient service for the listing, trading, and transferring of such new bond products as subordinated debt, write-down debt, exchangeable corporate bond, and credit asset securitization.

Third, it would, according to the strategy of breaking through the development bottleneck of securities derivatives, make up for its short planks, such as the unitary product structure of its market and the blank in the securities derivatives market, and focus on innovating individual stock option products. After a long time of efforts, the preparatory work for individual-stock-option-related business lines, rules, techniques, and market mobilization had been ready, and the time had come and the conditions had been ripe for launching.

Fourth, it would, in line with the strategy of enhancing the openness of the market, grasp the opportunity of accelerating the opening-up of the financial market and make great efforts on increasing the openness of the SSE’s market. For this, the SSE would further strengthen its in-depth cooperation with overseas exchanges, speed up its development of cross-border ETF products, actively explore in the mutual listing and launching of products and the cooperation with overseas exchanges, and intensify the interchange of data and quotes information with overseas exchanges, thus increasing the international level of the SSE and enhancing the international influence and competitiveness of the SSE market.

Gui said that the legislative planing of the Standing Committee of the 12th National People’s Congress had specified that amending the “Securities Law” would be among the class one projects for the legislative plan, symbolizing that the work of amending the “Securities Law” had entered the formal process of law revision. The market was badly in need of the amendment to the “Securities Law”, and the full initial preparation and the right time had constituted ripe conditions for accelerated promotion and early release.