.jpg)
Recently, SZSE convened a meeting, via spot meeting and online meeting, regarding carrying out investors’ appropriateness management on newly-issued share trading. The meeting aims at calling on all members to implement the CSRC’s requirement of strengthening the management on the clients’ appropriateness on newly-issued share trading, enhancing pertinence and effectiveness of investors’ appropriateness management, further cracking down the speculation. Nearly 500 people, including relevant principals from SZSE, managers and chief compliance officers from securities companies of broker qualification, and principals of related departments, attended the meeting.
It is pointed out at the meeting that investor’s appropriateness management is not only a fundamental work for capital market, but also an important means for the securities companies to carry out services for clients and elevate the clients’ value. Pushing forward the investor’s appropriateness management is of great significance for improving the market mechanism, intensifying the market function, maintaining the market order and protecting the investors’ legal rights and interests, even though it is a long and arduous journey, which shall constantly incorporate with the market status quo in improvement.
Last April, China Securities Regulatory Commission released Guidelines on Further Deepening IPO Reform, deeming the investors’ appropriateness management on IPO shares as an important measure of further deepening IPO reform. As the supportive regulations, SZSE also released Circular on Enhancing Investors’ Appropriateness Management Regarding IPO Trading, Guidelines on Supervising Abnormal Trading Behaviors during the Initial Stage of IPO Trading last June. SZSE, hand-in-hand with its members, actively implement CSRC’s relevant requirement, and strengthen the risk warning and education on clients who buy the newly-issued shares so as to enhance the clients’ risk awareness, and standardize the clients trading behavior. After the joint efforts of the market bodies in the previous year, speculation on newly-issued shares is curbed down somewhat, and rationality returns to the pricing in the primary market.
It is discussed at the meeting that, in order to cement the staged achievements of IPO system reform, as well as to coordinate with the special investigation by CSRC on the financial statement of companies pending for IPO approval, SZSE and its members shall draw experience and lessons from the newly-issued share trading appropriateness management last year, and further deepen the IPO trading appropriateness management.
It is reported at the meeting the overall situation of abnormal trading in the early trading stage after IPO and individual accounts that participated in speculation on IPO share trading. Issues requiring special attention in the member’s works regarding investors’ appropriateness management on newly-issued share are sorted. SZSE will send the accounts of typical speculation on IPO trading respectively to the members, who are asked to conduct relevant risk warning and education to the clients. The members are required to build classification of IPO speculation accounts and long-term mechanism for risk warning. What is more, SZSE also urge the member to implement the system requirement via self review and random investigation.
It is underscored at the meeting that, strengthening the IPO share trading appropriateness management is the matching requirement of facilitating the balanced and coordinated development of primary and secondary markets, and also the member’s duty to protect the client’s interest. However, at present, small-medium investors are still keen on speculation on IPO share trading, with the account participated in newly-issued share trading largely suffering losses. During the first half year of previous year, nearly 60 percent of small-medium investors who participated in the first trading day of newly issued share suffered losses. The less experienced is the investors, the graver losses they suffered, the higher price the new shares went on the first trading day, the heavier losses the individual suffered. It is required at the meeting, members shall, footing on the long-term benefits of the industry, intensify their awareness on appropriateness management on newly-issued share trading, and resolve to carry out the work, building good market environment, and greeting bigger opportunity of the innovative industry.
As the meeting closed, SZSE issue Circular on further carrying out Works on Investors Appropriateness Management on IPO Share Trading, which specifically deploys the follow-up works.
