Shanghai Stock Exchange To Build Integrity-oriented Legal System For Market

The symposium on the integrity and legal system construction in the market was held yesterday in response to “December 4, the National Law Publicity Day”.

The Shanghai Stock Exchange (SSE) held the symposium on the integrity and legal system construction in the market in response to the forthcoming 11th National Law Publicity Day. Relevant member companies, listed companies, fund companies, law firms, accounting firms and advisory bodies were invited to compare notes on their experiences in the integrity and legal system construction in the market. At the symposium, SSE Vice President Xu Ming summarized the overall situation and basic measures concerning the SSE’s boosting the integrity and legal system construction in the market by fulfilling its functions and taking its advantages in recent years.

Xu pointed out that in a recent speech by Chairman Guo Shuqing of the China Securities Regulatory Commission (CSRC) at the 9th Small and Medium Enterprise Financing Forum, Guo gave four directions for the capital market, namely, legalization, marketization, openness and internationalization. Besides, Guo took the integrity construction in the capital market as one of the 6 tasks to be greatly propelled. According to the deployment and requirements of the CSRC, the symposium was held to report the SSE’s work in the integrity and legal system construction in recent years and solicit the opinions of market participants and professional institutions on how to boost the integrity and legal system construction on the SSE and in the whole capital market.

Xu summarized the situation of the SSE’s implementing the united deployment of the CSRC and cementing the integrity and legal system construction in the capital market in the following 4 aspects: firstly, the SSE business rule system has been continuously perfected so as to optimize the basic system compatible with the integrity environment in the market. In recent years, guided by the "Securities Law" and the "Company Law", the SSE has amended an array of business operation guidance documents according to the CSRC’s requirement of continuously boosting the integrity construction in the market. Thus, a business rule system, which includes basic business rules, detailed business rules, business guidance documents and business notices involving all the key fields such as securities issuance, listing and trading as well as member management, has been consummated on the whole, with all the effective business rules up to more than 250 documents.

Secondly, the SSE’s frontline supervision function has been gradually intensified, in a bid to ensure an honest, standardized and orderly market. A hi-efficient frontline supervision could safeguard the sound market on the SSE. Over the past years, the SSE has built a trinity of listed companies, member companies and market surveillance and a frontline supervision structure characterized by the concerted supervision by Company Management Department, Membership Department and Market Surveillance Department and Legal Department by initiatively adapting itself to the change of the supervision situation in the all-floating era, adjusting the department structure, consistently strengthening the supervision resource allocation and ceaselessly innovating the regulation system. The SSE has arranged most personnel resources in its supervision work.

Thirdly, the SSE’s self-regulatory management system has been improved unremittingly, with an aim of lifting the legal level of the frontline supervision. The SSE has concluded in its market practices over the past years that to enhance the level of the legal operation on the stock exchange is a fundamental task for building a sound market on the SSE. Remarkable achievements have been made by the SSE in the consummation of self-regulatory management rules, the optimization of self-regulatory management mechanism and the intensification of self-regulatory management.

Fourthly, the law research and publicity have been conducted to build the integrity-oriented legal environment in the market. Especially in the law publicity work, the SSE has done it utmost to consolidate the law research and publicity as well as the investor education by giving full play to its role as a pivot tie in the capital market.

Finally, Xu added that the market economy is not only a legal-system-based economy, but also an integrity-oriented economy. What’s more, the capital market highly depends on the integrity environment under the legal guidance. It is a long-term, fundamental and hard task to build a sound legal environment and a high-integrity market. For the future market development, the SSE will build an integrity-oriented legal system and improve the legal-system level to foster an integrity environment compatible with its market size, structure and status. Xu also hoped that all walks of life would continuously devote themselves to the market development on the SSE and give advices on the SSE’s integrity and legal system construction.

At the symposium, all the representatives of member companies, listed companies, fund companies, law firms and accounting firms made speeches on how to punish lawbreaking and faith-breaking, advocate integrity-oriented legal administration and stick to compliance operation according to their businesses. Senior Partner Shen Guoquan of AllBright Law Offices held that the positioning of securities lawyer should be further specified. In addition, Partner Ma Jianping of Da Hua Certified Public Accountants held that the construction of integrity records should be taken as one of the appraisal standards of accounting firms as the integrity-oriented operation is a fundamental requirement for the CPA industry’s survival and growth.