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On May 24, the Shanghai Stock Exchange (SSE) held a news briefing to announce its future trends of self-regulation. Vice President Xu Ming of the SSE said that in the future the SSE will do a good job in further transforming regulatory concepts, improving regulatory efficiency, and stepping up disclosure in regulation, while cracking down on the alleged violations of laws and regulations on the securities market in a bid to further establish the regulatory authority.
Xu pointed out that as a key market player and self-regulator, the SSE will make effective efforts in three aspects in the future. In the aspect of transforming the regulatory concepts, the SSE will further relax restrictions and strengthen the regulation so as to make all the market players “fully responsible in their places”. For example, the direct channel for information disclosure energetically promoted by the SSE recently is just an important initiative for transforming the regulatory concepts and modes. In the future, the SSE will gradually transform the regulatory concepts by changing from “Prerequisite Examination” to “Aftermath Regulation” and enhancing the self-restriction mechanism of the market.
With regard to further improving regulatory efficiency, the SSE will try to avoid the overlapped regulation which will increase the regulatory costs. Internally, the SSE has set up the "Regulatory Committee" to coordinate the work in self-regulation. Externally, the SSE has given further support to the China Securities Regulatory Commission (CSRC) and its agencies, industry associations, and other relevant departments and institutions, and strengthened the coordination mechanism. The SSE has also further rationalized the processes and rules, streamlined procedures, and enhanced the rapid response mechanism.
With respect to further stepping up the disclosure and transparency in regulation, Xu said that it means not only disclosing the rules of the SSE’s self-regulatory management, publicly soliciting opinions from all market players in instituting the rules, and accepting the supervision of the market, but also disclosing the results, procedures, and processes of the regulation.
In addition to the promotion of the work in the abovementioned three aspects, Xu stressed that the SSE will crack down on the alleged violations of laws and regulations on the securities market in a bid to further establish the regulatory authority. At present, the SSE is revising its rules for disciplinary punishment by centralizing the relevant provisions previously implemented in the fields related to listed companies, market supervision, and others, constantly enriching and improving the regulatory means and measures, and reinforcing the punishing means. As for abnormal fluctuations in the market, the SSE will “investigate every case and never leave any violation of laws or regulations unaccountable”.
Through the above efforts, the SSE will fulfill the responsibilities of “Two Safeguards, One Promote” for the capital market, namely, vigorously safeguard the “Openness, Fairness, and Justice” on the capital market, safeguard the legitimate rights and interests of investors, especially small and medium-sized investors, and promote the stable, sound, and orderly development of the capital market.
At yesterday's briefing, the business departments of the SSE also announced the information of the regulation work and the progresses in important businesses such as the direct channel for information disclosure. In 2013, with regard to the violations of listed companies and relevant market players, the SSE has issued 18 decisions of regulatory measures (including letters on regulatory work), 3 decisions of disciplinary sanction, and 5 letters of intent for disciplinary sanction. Currently the focus is on the irregular operation of corporate governance, violations of listed companies in disclosure of information such as major transactions and major issues, and the dedication and fulfillment of duties of intermediaries in the process of information disclosure, etc.
Meanwhile, as an important part of self-regulation, the promotion of cash dividend distribution also achieved some success. On January 7, 2013, the SSE promulgated and enacted the “Guidance for Cash Dividend Distribution” with the dividend distribution of the 2012 annual reports firstly included in the scope of the Guidance. The data of the 2012 annual reports show that among the 954 SSE-listed companies, 653 companies introduced cash dividends in their profit distribution plans, accounting for 68.45% of the total, up from 59.50%. The total cash dividends planned to be distributed by SSE-listed companies in 2012 (including the semi-annual distribution) reached RMB595.9 billion, accounting for 35.16% of the total net profits owned by the shareholders of listed companies, with the proportion of cash dividend distribution higher than those in previous three years.
Moreover, the SSE recently issued the “Measures (Draft) for Implementation of Disciplinary Sanctions and Regulatory Measures” for publicly soliciting opinions, with an aim to rationalize the self-regulatory rules in a systematic way and integrate and standardize the sanctions on all kinds of regulated bodies, as well as strictly standardize the acts of self-regulation and improve the transparency and credibility of the regulation
