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First, the Shanghai Stock Exchange (SSE) will rationalize its work in terms of reform, innovation, transformation, and service. This requires the SSE to get prepared and carry out cooperation to support relevant issues involved in the reform of registration system for shares issuance, and accelerate construction of the SSE market in an innovative way. Besides, the SSE will promote innovation. Further, the SSE will conduct regulatory transformation, and promote transformation for both the market and itself. In addition, the SSE will improve the satisfaction degree of market participants according to market needs, in a bid to enhance its comprehensive and core competence.
Second, the SSE will do more researches regarding measures to enlarge and invigorate the blue-chip market, and build a complete market system with coordinated development of 4 major markets.
Third, the SSE will prepare for the simulated trading for individual stock options, strengthen services for strategic emerging industries, and promote the cross-border cooperation among exchanges.
Fourth, the SSE will build itself into a market-oriented and investor-friendly exchange. According to needs of investors, the SSE will accelerate the regulatory transformation of listed companies’ information disclosure, implement protective measures for small and medium-sized investors, and enhance regulatory transparency.
The SSE has recently issued its key work arrangements for 2014 by releasing this news on its micro-blog.
“Reform, innovation, transformation, and service” will be the key words for the SSE’s work for 2014. Here, reform refers to the implementation of work arrangements required in the “Decision on Strengthening In-depth Reform on Some Key Issues” put forward by the 3rd Plenary Session of the 18th CPC Central Committee, and the support for the service cooperation work of the China Securities Regulatory Commission (CSRC) for all reform issues. Namely, the SSE will take the initiative in supporting relevant issues involved in the reform of registration system for shares issuance. Besides, the SSE will cooperate with the CSRC to carry out in-depth research on the reform of registration system for shares issuance, and get prepared in all tasks involved in meeting the requirements in the reform of registration system for shares issuance. In addition, the SSE will support the work involved in the reform of refinancing examination, simplify and publicize standard, procedure, and progress of examination, and establish the market-oriented restriction mechanism. Moreover, the SSE will accelerate its market construction by meeting the needs of reform, in accordance with the requirement of promoting reform and innovation in all sides of economic and social development, which was put forward by the CPC Central Committee regarding economic work for 2014.
On the one hand, the SSE will reform its market system and product layout, better its product chain and innovate its trading methods, as well as build a complete market system with the blue-chip market as its core and coordinated development of the bond market, the assets management market, as well as the securities derivatives markets.
On the other hand, the SSE will strengthen opening-up, in a bid to promote the growing trend of opening-up of the financial market, accelerate further opening of the SSE, and actively participate in global competition.
“Innovation” requires the SSE to accelerate an array of innovation work on the basis of safe operation and risk prevention. The SSE will prepare for the simulated trading for individual stock options, strengthen services for strategic emerging industries, and promote the cross-border cooperation among exchanges, in order to enlarge and invigorate the blue-chip market. Moreover, the SSE will enhance the SSE market’s capacity and competence in serving the market through constant innovation and self-improvement.
“Transformation” means that the SSE will meet the needs in the key note of regulatory transformation, which was proposed by the CSRC for the securities regulatory work in 2014, as the key to regulatory transformation is building the SSE into a market-oriented and investor-friendly exchange. Besides, in market regulation, the SSE should turn its emphasis from prior examination and impartiality in rules to in-process and aftermath regulation, as well as protection for investors, especially small and medium-sized ones. As for market services, the SSE should transform from the needs of self-administration to paying attentions on the experience of market participants, especially investors.
“Service” here requires the SSE to specify procedures, enrich content and means, attach importance to feedbacks, enhance transparency, and improve market participants’ satisfaction degree, so as to improve its comprehensive and core competence, according to needs of the market. As for investors, the SSE will implement detailed requirements for protecting small and medium-sized investors in all procedures of self-disciplinary regulation. In addition, the SSE will pay more attention to the market’s needs and investors’ experience in development of new products, and provide services featured with user-friendliness for investors. Further, the SSE will promote the risk margin system for rule-breaking listed companies and the appraisal system for protecting the legal rights and interests of small and medium-sized investors, as well as improve the voting mechanism for small and medium-sized investors, and seek new mechanism to solve various disputes over rights and interests of small and medium-sized investors. Besides, the SSE will rationalize the new mechanism mainly featured with performance promotion meeting and presentation meeting, as well as build an industry’s communication platform featured with efficiency, transparency, and rationality, in a bid to greatly improve operational transparency for listed companies. Regarding shares issuers, the SSE will improve and enrich its service mechanisms and methods mainly oriented for IPO-related services and enhance its proficiency in services, in addition to promoting incubation for small and medium-sized enterprises, and reinforcing cooperation with the agency share transfer system, regional shares markets, and key national hi-tech parks. Moreover, the SSE will better its service quality for members, intermediaries, regulatory institutions for securities, and other participants.
According to the above-mentioned work principle, the SSE has made the key work arrangements for 2014 including:
First, the SSE will continue to implement the strategy of the blue-chip market, in order to strengthen reinforced rationalization of the blue-chip market.
1) The SSE will first continue to strengthen services for strategic emerging industries, and facilitate the development of new industries such as the internet, eco-protection, biology, new material, high-end equipment manufacture, new generation of information technology, cars driven by new energy, new energy, and culture, with an aim to rationalize its function in market services and enhance the representativeness of the real economy.
2) The SSE will reinforce its incubation work for small and medium-sized enterprises, and strengthen cooperation with the agency share transfer system, regional equity exchange centers, key national hi-tech parks, and others.
3) The SSE will steadily launch preferred shares. This requires the SSE to complete all supporting preparations in terms of the rules, procedures, and technologies of preferred shares, and relevant implementation work, according to relevant regulations. Further, it will publicize relevant knowledge of preferred shares in order, and popularize relevant policies, as well as market services and promotions.
4) The SSE will fuel the market-oriented reform for mergers, acquisitions, and reorganizations, and tap idle assets. This requires the SSE to support listed companies, especially state-owned companies, to accelerate mergers, acquisitions, and reorganizations on various platforms for reorganization of state-owned companies. Besides, the SSE will facilitate communication between listed companies and non-listed enterprises in emerging industries, so as to fuel the structural adjustment and industrial upgrading of listed companies. In addition, the SSE will support the work of format examination on the schemes on significant assets reorganization, and sort out relevant laws and rules concerning mergers, acquisitions, and reorganizations, as well as innovate supporting measures on issues such as buyout bonds, buyout funds, and bridge loans, in a bid to promote the rationalized structural adjustment to idle assets of listed companies.
5) The SSE will promote innovation on the trading mechanism for the blue-chip shares, and study to adopt different trading mechanisms for the blue-chips market according to its characteristics.
6) The SSE will continue to urge and guide dividend distribution of listed companies, and keep balance between investment and financing on the capital market. Further, the SSE will study to launch a blue-chips sector with high yield, and promote improvement for relevant accounting policies and regulatory policies, with an aim to render this sector into a major channel attracting long-term capitals such as social security funds, insurance funds, and social public-welfare funds to realize value maintenance and appreciation.
7) The SSE will improve its listing mechanism, and implement the new delisting system strictly.
The SSE will continuously implement the strategy for the bond market and vigorously develop and regulate the bond market. Specifically, apart from increasing the value of bonds for custody on the bond market, it will expand the size of the bond market and cement the promotion of bond issuance by taking the opportunity of the expanded pilot of corporate bonds. Business sizes of treasury bond pre-issuance, policy-related financial bonds, and other financial institutions’ bonds, and size of convertible bonds’ issuance and listing will be enlarged. Service efficiency for SME private bonds will be continuously enhanced. More efforts will be made to boost product innovation and diversify investors. Issuance and listing of exchangeable bonds and write-down bonds will be realized, the system of collateralized repo transactions of bonds will be further perfected, and rules for the investor suitability management will be consummated, in addition to taking an array of measures to boost commercial banks to participate in the exchanged-based bond market. Besides, the SSE will continue to propel the interflow between on-floor and over-the-counter bond markets. Under the condition that the market interest rate increases with high fluctuations, it will do well in the work of preventing, alerting, and eliminating risks on the bond market. The bond rating management will be reinforced, a dynamic management system of risks for bonds’ duration will be established, and dynamic monitoring, alerting, and disposal systems of bond risks will be perfected as well. Moreover, the SSE will improve the system of bonds’ filing and issuance and that of bonds’ listing and trading, and integrate all the bond trading systems.
The SSE will adhere to fueling the strategy of the derivative market as well as developing derivatives and innovative products. It will make full preparations for individual stock option products, and perfect business schemes and rules. Business schemes, risk control measures, and technical systems will be tested and improved through simulated trading, trainings for investors will be strengthened, and supporting mechanisms for the operation of individual stock options will be further improved as well. Expansion of the fund market will be accelerated with the market participation degree to be boosted as well. In addition, it will insist on perfecting the fund product layout on the basis of commodity ETF, graded fund, and LOF platforms, further boost product innovation, and provide more means and instruments for assets management.
The SSE will unceasingly speed up the strategy of internationalization and propel its opening-up. It will fuel cross-border cooperation among exchanges, participate in the construction of the Shanghai Free Trade Zone, and build an international platform of financial assets trading. Besides, it will continue to perfect the measures for pilot of overseas companies’ issuing RMB-denominated bonds on Shanghai market, and relevant business rules, and relevant business operation schemes and procedures. Furthermore, the SSE will boost listing of SSE indices on major exchanges in the world, push the A-share market into overseas major indices, and propel the development of cross-border ETFs.
In order to effectively carry forward the above 4 strategies, the SSE suggested that it will continue to strengthen the operation security, the regulatory environment, and other security work in 2014.
With regard to ensuring operation security, the SSE will establish a rapid responsive system to unusual transactions and information, and set up a risk-warning mechanism to emergencies, so as to effectively control market risks.
With regard to guaranteeing regulatory environment, the SSE will first and foremost realize the regulatory transformation. It will orient itself to investors’ demands, actively promote regulatory transformation, make efforts on promoting the market’s openness and transparency, bring off the positive function of regulation in promoting the market development, and implement the 9 suggestions on protecting small and medium-sized investors put forward by the General Office of the State Council of PRC, so as to protect the rights and interests of investors, especially small and medium-sized investors, from the design of new products and trading mechanism to every link in the trading.
First, the SSE will actively explore the regulation on the information disclosure of listed companies under the registration system and the direct channel for information disclosure. It will implement the direct channel for information disclosure in full scale at the right time, and explore the retrospective investigation mechanism of information disclosure. Besides, it will complete the transition from the jurisdiction-area-featured regulation model to the regulation model of industry information disclosure, intensify the continuous regulation on information disclosure, implement the guidance on industry information disclosure in full scale, and launch the third-party evaluation on information disclosure standards. In addition, it will promote the construction of the pre-disclosure system of shareholding decrease by holders of shares with sales limit, and strengthen regulation on listed companies’ fulfillment of relevant promises.
Second, the SSE will fully promote the openness of self-regulation and the construction of market transparency. It will formulate and release public lists of the SSE’s technologies, business lines, and regulation, and publicize regulatory rules and results.
Third, the SSE will highlight the protection of the rights and interests of small and medium-sized investors and reinforce investor education. It will improve the “SSE E-interaction Platform, keep carrying out the activities of “I’m a Shareholder” and “Investors Face-to-face”, and form a normal working mechanism. It will also research and push forward the risk margin system for rule-breaking listed companies and the appraisal system for protecting the legal rights and interests of small and medium-sized investors. Besides, it will introduce and implement relevant guidance on small and medium-sized investors’ separate vote-counting, full online voting, and on carrying out cumulative voting system and voting right collection, and explore a mechanism to resolve various disputes over the rights and interests of small and medium-sized investors.
It is introduced that till the end of December, 2013, the total market value of shares on the SSE market had reached RMB15.1 trillion and the value of bonds for custody had reached RMB1.7 trillion. Its total turnover had been RMB86.5 trillion, among which the stock’s turnover had been RMB22.96 trillion, the bond’s turnover had been RMB62.6 trillion (including RMB1.53 trillion of spot goods and RMB61.05 trillion of repo), the fund’s turnover had been RMB0.8989 trillion (including RMB670.7 billion of ETFs, RMB205 billion of transactional money market funds, and RMB23.2 billion of closed-end funds), and the turnover of others had reached RMB41.1 billion. And the raising and financing amount of the SSE’s shares and corporate bonds had reached RMB550.8 billion. Till the end of December, its stock market value, turnover, and financing amount had ranked the 7th, 5th, and 6th respectively among all major exchanges in the world.
In 2013, though IPO paused, 154 listed companies realized the equity-supported refinancing and fundraising amount of RMB251.6 billion; 55 listed companies completed the corporate-bond-supported financing of RMB170.7 billion, among which RMB93 billion, about 25% of the total annual financing amount in Shanghai market, went to support the financing of listed companies in strategic emerging industries; and 36 companies completed the significant assets reorganization with the transaction amount of RMB73.7 billion, newly adding 5 companies each with the market value of over RMB10 billion.
In 2013, altogether 653 listed companies on the Shanghai market (68% of the total number of listed companies) launched the cash dividend distribution program (including the semi-annual distribution) and gave out the dividends of RMB595.9 billion. The amount of cash dividend took up 35.16% of the total profit of listed companies’ shareholders, reaching a record high.
Last year, 107 listed companies held the briefings for cash dividend distribution, annual performance, and other events through the “SSE Roadshow Center”; the average daily page view amount of “SSE E-interaction Platform” reached 46,000; the total page view amount of the investor education website (http://edu.sse.com.cn/) was 58.5 million with the click rate increasing by 77% year-on-year. Besides, such activities as “I’m a shareholder: small and medium-sized investors’ visits to listed companies”, “Face-to-fact Communication”, and “Monthly Q&A” effectively set up interactive bridges between investors, especially small and medium-sized investors, and listed companies.
In 2013, 1,686 kinds of bonds were listed on the SSE, the value of bonds for custody amounted to RMB1.72 trillion, and the total turnover reached RMB62.58 trillion (including the spot trading of RMB1.53 trillion), which increased by 65%, 62%, and 65% respectively compared with those at the end of 2012, all reaching record highs. During 2013, the SSE filed the private placement bonds of 136 small and medium-sized enterprises with the total filing amount of RMB26.57 billion, listed 114 bonds (up by 159% than the previous year) with the total amount of RMB15.2 billion, and issued 111 kinds of bonds with the total amount of RMB15.646 billion (up by 178% than the previous year). And it achieved the accumulative trading amount of RMB18.6 billion, up by 365% than the previous year, and over fulfilled its annual target.
The SSE launched five key products in 2013, including currency, bonds, gold, sector ETF, and efficient subscription and redemption money market funds, thus further enriching its fund product varieties. Altogether 87 kinds of fund products were newly added, including 20 ETFs and 6 innovative money market funds. By the end of December, the market value of all funds had reached RMB368.7 billion and the SSE’s annual trading volume, for the first time, exceeded one trillion, reaching RMB1.2121 trillion. And the 3 kinds of bonds, gold, and currency ETF products realized the intraday trading.
The SSE successfully launched the collateralized repo of stocks in 2013, steadily realized the quotation repo on a regular basis and the pilot of securities lending of refinancing, and it expanded the coverage of margin trading and securities lending and the scale of underlying securities. In 2013, the SSE achieved the total transaction scale of all innovative business lines of RMB8.33 trillion.
In 2013, the SSE actively promoted the cross-border index cooperation. It pushed the A-share market to be included in MSCI index and promoted the SSE indices to be listed in major international exchanges. Besides, it advanced the development of cross-border ETF products, successfully launched and listed the NASDAQ 100ETF, and completed the issuance of S&P 500 ETF.
The SSE officially launched its direct channel for information disclosure on July 1, 2013. By the end of December 2013, listed companies on the Shanghai market had submitted 23,619 announcements, among which 83.22% were “direct channel” announcements, and 16.78% were prior examination announcements.
In 2013, with regard to the illegal behaviors of listed companies and relevant bodies, the SSE made 133 disciplinary sanctions and regulatory decisions, which involved 68 listed companies and about 285 directors, supervisors, and senior executives. It censured 28 listed companies’ directors, supervisors, or senior executives, 6 listed companies, 1 controlling shareholder, and 2 actual controllers in public, and identified in public that 3 persons were not suitable to take the position of director, supervisor, or senior executive. Meanwhile, the SSE completed the investigation and handling of 490 abnormal transactions and investigated 845 securities accounts. In 2013, it reported a total of 130 clues to the CSRC, up by 124% compared with the previous year.
