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In order to implement the requirements of the Securities Law, standardize the regulation of specific swing trading, and stabilize market expectations, the CSRC publicly solicited opinions on the Several Provisions on Improving the Regulation of Specific Swing Trading (Exposure Draft) (hereinafter referred to as the “Provisions”) on July 21, 2023. SZSE will do a good job in researching and formulating the supporting self-regulatory rules in accordance with the unified deployment of the CSRC.
As a “preventive” system to regulate the insider trading by specific investors such as shareholders holding more than 5% of the shares of a listed company, directors, supervisors, senior management etc., the specific swing trading system aims to prevent insiders from utilizing their information advantage to make profits from insider trading. Since its establishment, the specific swing trading system has vigorously maintained the order of the capital market and effectively guaranteed the fair and just participation of investors in trading, but there are also urgent problems and difficulties that need to be solved. The systematic construction of a specific swing trading system is just in time. It is conducive to standardizing the regulation of specific swing trading, stabilizing market expectations, enhancing the confidence of international investors, and promoting the further deepening of the reform and opening of the capital market.
Under the five principles, namely, to regulate in accordance with the law, to respect practice, to be consistent both internally and externally, to stabilize expectations, and to facilitate transactions, the Provisions summarizes the mature and effective experience and practices in regulatory practice, clarifies the key constituent elements such as the applicable subject of specific swing trading, as well as the subject, act and timing of buy and sell, and incorporate into the exemptions of specific swing trading the acts that do not involve the risk of insider trading and that are conducive to the lowering of market costs. It also specifies the applicable standards for domestic and foreign institutions, treats domestic and foreign investors equally, and improves the supervisory and management functions of the specific swing trading system. During the period of soliciting opinions, SZSE will collect market demands and opinions by way of symposiums and surveys, etc. After the Provisions is formally released and put into effect, SZSE will, in accordance with the Provisions requirements, actively guide investors to buy and sell securities in accordance with the rules and regulations, and practically safeguard the order of market transactions.
Next, SZSE will follow the overall tone of seeking progress while maintaining stability, adhere to the direction of market-oriented and rule-based reform, and under the unified leadership of the CSRC, improve the institutional system, seriously do a good job in the implementation of the articulation of the upper specific swing trading policy related to the study and formulation of self-regulatory rules, clarify market expectations, enhance the vitality of the market, and better adapt to the needs of the development of the market. Also, we will strictly implement self-discipline management, give full play to the stock exchanges’ first-line supervision and self-discipline management duties, monitor systematically the trading behaviors, and urge listed companies to make timely disclosure of the specific swing trading situation and adopt self-discipline regulatory measures in time to help the high-quality development of capital market.
