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The Articles of Association of Shenzhen Stock Exchange (2018 revised draft) (hereinafter referred to as the “revised draft of the Articles”) is high on the agenda of the 2018 Members’ General Meeting of SZSE currently held off-site.
The Articles of Association serves as a foundation and guidance for the smooth running of SZSE. This is the first time for SZSE to amend its Articles of Association since the 19th CPC National Congress as well as since the revision of Measures for the Administration of Stock Exchanges (hereinafter referred to as the “Measures”) was implemented. It is of great significance in that it helps strengthen rule of law in Shenzhen market, lead members to implement the guiding principles of 19th National Congress, enhance SZSE’s frontline oversight functions at a new historic starting point, and push forward capital market reform and stability.
Guided by Xi Jinping thought of socialism with Chinese characteristics for a new era, the revised draft of the Articles fully reflects the guiding principles of the 19th Party's Congress, the 3rd Plenary Session of the 19th Central Committee, the Central Economic Work Conference and the National Conference on Financial Work, as well as the decisions and arrangements of China Securities Regulatory Commission (CSRC) and fully incorporated new requirements from the revised Administrative Measures, the revisions mainly include:
First, strengthening the party's leadership position. Party committee is further clarified to assume a central role of political leadership; discussions and decisions on major matters shall be conducted in accordance with rules and regulations to ensure materialization of the Party and state’s policies. It is also specified that the party’s centralized and unified leadership over major matters shall be upheld; major decisions, personnel appointment and dismissal and project and capital arrangements shall be reviewed by the Party Committee before being submitted to the Administrative Committee.
Second, strengthening frontline oversight functions. The exchange’s scope of functions is expanded with the addition of the right to suspend and resume the listing of stocks as well as re-list the stocks, provide transfer services for non-public stocks, supervise securities service agencies, and protect investors. Entities like bond issuers are also subject to supervision. More front-line regulatory measures are introduced such as imposing “punitive default penalty” as a disciplinary measure and the issuance of “Letter of Recommendation”. Members’ responsibilities for management of members’ transaction behaviors is strengthens and risk control on the part of the exchange is enhanced.
Third, optimizing governance structure. The authority of the Administrative Committee, General Manager and Board of Supervisors are further clarified; regulations on the nomination of chairman, deputy chairman, and chief supervisor are revised; reporting by the Administrative Committee and Board of Supervisors to the CSRC is specified.
Fourth, improving relevant procedural requirements. New market players may apply for hearings and review to safeguard their legitimate rights and interests. The voting methods of members’ general meetings are diversified to facilitate the establishment of a routine meeting mechanism.
Going forward, SZSE will comply with the requirements of rule of law governing both the market and the stock exchange and push forward the materialization of Measures based on current revised draft of the Articles and the revised Agreement on Stock Listing. Efforts will be made to amend the Stock Listing Rules, Corporate Bond Listing Rules, Membership Management Rules, and improve internal rules such as the Regulations on the Compiling of Business Rules, Rules of Procedure for Meetings. Multi-pronged efforts both internally and externally will be made to lay an institutional foundation for smooth running of the exchange and the front-line oversight functions and promote rule of law in the capital market, thus contributing to building a world-class stock exchange and internationally competitive capital market in the new era.
