China's Capital Market Welcomes New Nine Guidelines
ISSUING AUTHORITY:
The State Council of the People's Republic of China
DATE OF ISSUANCE:
April 12, 2024
EFFECTIVE DATE:
April 12, 2024
After a decade, China's capital market once again welcomes the "Nine Guidelines”. On April 12, 2024, the Chinese government released the Opinions of the State Council on Strengthening Supervision, Preventing Risks, and Promoting the High-Quality Development of the Capital Market (the “Guidelines”), outlining nine key sections for enhanced regulation and development.
These Guidelines focus on stricter controls for issuances and listings, enhanced continuous supervision of listed companies, increased delisting oversight, stronger regulation of securities and fund institutions. They also emphasize market stability, long-term investment promotion, comprehensive reforms and collaborative efforts for market development.
To implement these Guidelines, the China Securities Regulatory Commission (CSRC) has introduced six draft rules related to issuance, listed company, securities company and trading supervision. Revisions include higher standards for STAR Market applicants on science and technological innovation attributes, expanded on-site inspections for IPO companies with increased proportion of such IPO companies subject to random inspection and tighter regulations on shareholder reductions.
For listed companies, new measures address major shareholder reductions and ensure compliance with reduction restrictions post-divorce. For securities companies, enhanced supervision aims to promote high-quality development with a focus on governance, internal checks and risk management.
New trading regulations define program trading, establish reporting, risk control requirements and strengthen high-frequency trading supervision.
Additionally, the Shanghai, Shenzhen, and Beijing Stock Exchanges have solicited public consultations on 19 business rules, aiming to improve listing conditions, standardizing share reductions and enforce delisting standards.
This regulatory overhaul aims to create a stable, transparent and high-quality capital market in China.
Reference:
《國務院關于加強監管防范風險 推動資本市場高質量發展的若干意見》
