Shanghai Stock Exchange President Zhang Yujun : Shanghai Stock Exchange To Propel Common Development Of Four Markets

The Shanghai Stock Exchange (SSE) would fully implement the development strategy and propel the common development of the multi-tiered blue chip market, the bond market, the fund market and the derivatives market, said SSE President Zhang Yujun yesterday.

At the "Seminar on Innovation and Development of Securities Companies", Zhang pointed out that the SSE would make renewed efforts on developing the multi-tiered blue chip market and improving the abilities to serve the real economy. By the end of April, the market value of 938 SSE-listed companies has amounted to RMB16.44 trillion, accounting for about 35% of China's GDP in 2011. To be specific, the SSE, for developing the multi-tiered blue chip market, will attach importance to five tasks as follows. Firstly, it will further improve the services for more excellent enterprises to go public, carve out the listing resources of strategic emerging industries, modern service industries and culture-related enterprises, and adjust the structures of listed companies. Secondly, it will push forward listed companies for reinforced rationalization and guide them for improvement of industrial concentration through reorganization, merger and acquisition. Thirdly, it will promote the governance of listed companies and toughen the punishment on rule-breaking behaviors. Fourthly, it will enhance the transparency of listed companies. Finally, it will perfect the delisting system.

Besides, the SSE will renew its efforts to develop the bond market. By the end of April, the total volume of SSE-listed bonds has reached 701 and the amount of bonds for custody has reached RMB802 billion. Firstly, the SSE is creating conditions for SMEs' private placement of bonds and for commercial banks and insurance companies to issue subordinated bonds on the SSE market. Secondly, it will push forward insurance companies, enterprise annuity, trust companies and other institutions to participate in the bond market. Thirdly, it will strive to make experiments on pre-issuance and transaction of treasury bonds within the year and promote one-on-one repurchase upon research; meanwhile, it will launch the deal-by-deal real-time delivery and settlement mode and take the initiative to apply the mode to small and medium bonds. Fourthly, it will rationalize the systems for the bond market based on the "Unification of Five Aspects", develop the over-the-counter market for bonds and establish a multi-tiered bond market. In 2012, the SSE will manage to achieve over RMB1 trillion for the amount of bonds for custody and match the trading volume with the amount of shares.

Moreover, the SSE will develop the fund market and guide the conception of value investing. By the end of April, a total of 23 ETFs have been listed on the SSE, with the market value of RMB48.9 billion. The Huatai-PineBridge CSI 300 ETF whose issuance was just completed raised RMB33 billion in its first raising. Firstly, the SSE will go all out for the issuance and listing of cross-border ETFs. Secondly, it will develop ETFs and other index fund products, such as monetary ETFs, bond ETFs, commodity ETFs, actively-managed ETFs, leveraged ETFs and inverse ETFs. Thirdly, it will make the T+0 intraday trading achievable on the ETF secondary market and formulate a system for liquidity service providers.

Last but not least, the SSE will promote the development of the derivatives market and satisfy the demands of risk management. It plans to launch the simulated trading of option products based on ETFs and individual stocks and to keep studying on the schemes of covered warrants and equity warrants.

According to Zhang Yujun, by following the guideline for the innovation and development of the capital market, the SSE, in line with the principles of controlling risks and making progress in an orderly way and the orientation of market demands, will make more effort on the innovation in trading mechanism and traded products in a bid to enhance the abilities of the capital market to serve the real economy, improve the overall strength of securities companies, realize its strategy and effectively control the market risks.

Zhang said that the SSE would spare no effort in the innovation from the following six aspects. Firstly, the SSE will reinforce the rationalization of margin trading and securities lending businesses and get well-prepared for refinancing. Secondly, it will perfect the block trading mechanism in terms of extending the period, lowering the requirements, ushering in the block trading with lock-up periods and increasing the types of orders. Thirdly, it will develop the innovative products with low risks for standardized trading on the over-the-counter market. Fourthly, it will make research on the scheme of collateralized repo trading businesses for securities. Fifthly, it will launch the research on the schemes of unit transfer businesses for the graded assets management plan and the traded assets management plan according to the market demands. Sixthly, it will improve the service