.jpg)
In accordance with the spirit of the National Financial Work Conference, to implement the arrangements of the Mid-year National Regulation Work Conference on Securities and Futures, and to promote restrict supervision pursuant to laws, Shanghai Stock Exchange (“SSE”) and Shenzhen Stock Exchange (“SZSE”) co-organized an international seminar on securities exchange front-line regulation in Shanghai on August 25, 2017, focusing on the role played by securities exchanges in front-line market supervision and regulation. The seminar was hosted Liu Shiyu, Chairman of China Securities Regulatory Commission, attended and gave a speech at the seminar.
As Liu Shiyu pointed out, securities exchanges are the organizers, operators and self-disciplinary regulators of the market with distinctive strengths that play an irreplaceable role at the front line of capital market supervision. “Internationally, securities exchanges are generally created with a legitimate function of market supervision and regulation. In whatever form a securities exchange changes with time, its role as a supervisor and regulator remain the same, which is a common understanding internationally and has been proved by abundant practices. Practical experiences in China show that front-line regulation must be firmly upheld and there is still room for improvement. Since 2016, the focus of work of SSE and SZSE has shifted to front-line supervision. A transaction behavior supervisory mode based on supervision of members was explored and established; regulation of information disclosure is imposed on listed companies to ‘get to the root of the issues’; market disorders are contained; and the market ecology is improved. The capital market in China is relatively stable over the past two years due to the front-line regulation voluntarily undertaken by SSE and SZSE and both parties shall better play their roles in the future. We hope that securities exchanges all cooperate internally in front-line supervision and regulation. CSRC shall make greater efforts to assist in the practical cooperation between domestic and foreign securities exchanges and contribute to the stability and prosperity of the global capital market.”
Securities exchanges from different countries and regions have introduced their own experiences in market supervision and risk prevention and have conducted heated discussions on how to better coordinate administrative supervision and the discipline and regulation imposed by securities exchanges and how to enable members to actively undertake the responsibilities regarding client transaction management. All participants acknowledged that the global capital market is faced with an increasing number of issues and challenges and that the prevention of financial risks are their top concern when they carry out economic and financial work in their own countries. Capital markets vary in different region, so do regulation practices. Yet all participants believe that reinforcement of market regulation is conducive to the stable and healthy development of the capital market in the long run and that securities exchanges should give full play to its strengths and role as a front-line market supervisor. Stock exchanges from emerging markets such as Korea and India hold that capital markets dominated by individual investors are in need of strict and forceful regulation; and stock exchanges should timely and strictly supervise and regulate severe speculation and illicit trading based on false declaration, safeguard fair dealing and maintain orders. On the seminar, all securities exchanges have reach a consensus on reinforcement of international cooperation and the discussion on establishing cross-border and cross-exchange supervision and regulation. All the exchanges agreed that they shall deepen cooperation on market supervision and regulation to counter the impacts of global financial risks in the future.
Next, SSE and SZSE shall earnestly perform their responsibilities of market supervision and risk prevention at the front line; improve the transaction behavior supervisory mode based on member regulation; and strengthen the communication between domestic and foreign exchanges. Both parties shall, by drawing on the excellent experience of foreign exchanges in market regulation, constantly enrich regulatory measures, improve their supervisory ability, enhance regulation efficiency, push forward the sharing of information on market control and supervision, safeguard the legitimate interests and rights of small and medium investors, promote the stable and healthy development of the capital market and try to achieve excellent results prior to the 19th National Congress of the Communist Party of China.
Relevant officials from CSRC, and representatives from 11 securities exchanges including SSE, SZSE, NASDAQ, Hong Kong Exchanges and Clearing Limited, Pakistan Stock Exchange, London Stock Exchange, Japan Exchange Group, Bombay Stock Exchange, Singapore Exchange Regulation Pte. Ltd., Taiwan Stock Exchange Corporation, and Korea Exchange attended and spoke at the seminar.
