Interpretation of Liu Shiyu's "Capital Theory" by the Six Hot Issues

At the press conference held by the State Council on February 26, the Chairman of the China Securities Regulatory Commission, Liu Shiyu and other CSRC officials talked about the development of the capital market and the development of the market, facing market regulation, the New Third Board and the A-share market. In-depth and comprehensive response to the hot issues of concern. On the whole, the CSRC will continue to implement strict regulatory measures on the capital market in 2017 to effectively protect the interests of investors and maintain fair and equitable markets.

Keyword 1: “Regulatory”

At the beginning of the meeting to promote the coordinated development of the stable development of capital market reform, Liu Shiyu briefly summarized the work of the CSRC in 2016 in three words, and highlighted the supervision. Liu Shiyu said at the meeting that the work of the CSRC in the past year can be summarized into three words, namely “stable, strict, and progressive”, and that the primary task of the CSRC is supervision, and the second and third tasks are supervision.

As far as the first keyword "stable" is concerned, Liu Shiyu said that this is mainly due to the fact that China's capital market policy has been expected to be stable in the past year, the market is running stable, and the pace of reform is stable. Talking about the second keyword, Liu Shiyu elaborated on three aspects: strict standards, strict implementation and strict management. He said that for the chaos of the capital market, the CSRC timely swords and resolutely brightens the sword. Do not let go, the timely filing of the case, the thorough investigation of the thorough investigation. As for "advance", Liu Shiyu said that this is reflected in the improvement of the efficiency of the IPO of enterprises in poverty-stricken enterprises on the premise of adhering to the standard, and the timely revision of the relevant systems for major restructuring and refinancing of listed companies. It also indicated that the CSRC fully exerted the first-line supervision function of the exchange, innovated the means and mechanism for the protection of investor rights and interests, and explored the establishment of a multi-mediation and resolution mechanism for securities disputes.

At the meeting, Liu Shiyu used pearls to compare the listed companies, saying that "the pearl is the quality of the listed company, that is, the listed company" and "the pearl necklace has a lock on the string. This is supervision." In addition, Liu Shiyu also said that the capital market should strengthen supervision. Protect the legitimate rights and interests of investors.

Judging from the regulatory penalties notified at the press conference of the CSRC on February 24, the CSRC made a decision on the punishment of eight cases including Huiqiu Technology's illegal letter. Among them, the CSRC intends to decide to impose a fine of 5.7 million yuan on a series of cases involving alleged violations of information disclosure. It is guilty of notifying the illegal disclosure of information disclosure and manipulating the stock price by about 3.47 billion yuan. Eleven parties adopted a lifelong securities market ban. At the same time, the Shenzhen Stock Market supervision dynamics from February 13th to 17th of the Shenzhen Stock Exchange also showed that within one week, the Shenzhen Stock Exchange conducted a survey on two abnormal trading transactions of securities, and verified 14 major issues of listed companies and submitted them to the CSRC. Reported 2 suspected cases of suspected violations of laws and regulations.

Keyword 2: "MSCI Index"

The inclusion of the A-shares in the MSCI index has always been a topic of concern to the market. Regarding the issue of when China was included in the MSCI index, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, also answered the question, saying whether the A-shares are included in the MSCI index, the decision is first MSCI is also a business decision of MSCI, and China has always been happy to see it.

Fang Xinghai said that it is impossible to judge whether China can be included in the MSCI index this year. In addition, Fang Xinghai said that regardless of whether it is included or not, China's stock market and even the entire capital market will not change along the direction of marketization, rule of law, and internationalization. The pace of reform and opening up will not be because MSCI is included in A. The stock index changed. At the same time, Fang Xinghai believes that any emerging market stock index, whether it is MSCI or other indexes, if there is no Chinese stock in it, this stock index is very incomplete.

It is understood that MSCI is a supplier of equity, fixed assets, hedge funds, and stock market indexes, and its various indexes have been compiled. The MSCI Index is an important reference standard for institutional investors around the world, especially for passive investors who track the index. Wang Jianhui, director of the First Securities Research Institute, said in an interview with the Beijing Business Daily that the index is an index recognized by international investors, especially passive investors. Many products developed by the company include ETFs or active indexes. The basis of product development is to use their indices to redevelop the constituent stocks. Talking about the significance of China's inclusion of the MSCI index, Wang Jianhui said frankly, in theory, there are probably more than 300 billion US dollars to increase the allocation of A shares. Since the MSCI index is a major international index, there will be a significant boost to the internationalization of A-shares and the attractiveness of investors in the A-share market.

According to the data, on June 9, 2015, MSCI Minghao announced the results of the 2015 global market classification review in Geneva, saying that China A shares are on track to be included in its global benchmark index. MSCI Alum has clearly stated in its statement that it will form a working group with the China Securities Regulatory Commission to help deal with the remaining issues that hinder the inclusion of A-shares. Regarding China's inclusion of the MSCI index, Wang Jianhui said that the main reason is the market access level. For example, the quota of QIFF, many companies still need to apply for the quota, not completely liberalized. "In addition, the interconnection of the market is not like other markets. Of course, we also have Shanghai-Hong Kong Stock Connect, but the other party may still feel that it is not open enough. Therefore, it is difficult to have an open market in terms of incorporating the international index. "Wang Jianhui said. In addition, Wang Jianhui said that there is still a core reason for this. For foreign exchange control, there are restrictions on remittance, but remittance is more troublesome, so the limited flow of funds is also a core obstacle to the inclusion of this index.

Keyword 3: “Overseas Investors”

As for foreign investors, it is also one of the topics of market concern. When asked about China’s plans to open up capital markets to foreign investors, Fang Xinghai said that the securities and futures market welcomes foreign investors and overseas service providers to China. Conduct business.

According to reports, foreign investors generally include two aspects. First, foreign institutional investors invest in China's stock market, bond market and so on. This can be solved through QFII and other mechanisms, including Shenzhen-Hong Kong Stock Connect and Shanghai-Hong Kong Stock Connect. On the other hand, overseas service providers, such as brokers, fund management companies, and futures brokerage companies, can enter the Chinese market to provide services.

Fang Xinghai said that the equity ratio of overseas investors of joint venture securities companies can now reach 49%, and fund management companies and futures companies can reach 49%. Private equity management institutions, foreign capital can be operated solely by the government. Under the framework of the Closer Economic Partnership (CEPA) between the Mainland and Hong Kong, there are still some concessions for Hong Kong brokers to enter the Mainland. This is also to promote Hong Kong's better development and enhance Hong Kong's status as an international financial center.

Fang Xinghai also said that he intends to take some measures to participate in the Chinese securities and futures market by means of joint ventures in overseas institutions, including gradually increasing the share ratio of foreign securities holding institutions held by foreign investors, with the aim of developing the domestic securities and futures market. better.

In particular, Shanghai-Hong Kong Stock Connect was further improved, and Shenzhen-Hong Kong Stock Connect was successfully opened. The institutions and stock exchanges of the securities industry participated in the construction of the “Belt and Road” and achieved relatively gratifying results.

Well-known financial scholar Bu Naxin said that this measure may have a far-reaching impact on accelerating the opening up of the financial industry. It is definitely a positive signal for foreign investment. China's financial market is developing fast and has great potential, but it is slow to start. The degree of deficiencies is insufficient, and with the integration of global finance, the pace of opening up to the financial industry in China should be appropriately accelerated. This may be accompanied by relevant laws of relevant departments.

Keyword four: "New Three Boards"

The reform and development of the New Third Board has always been a topic of concern to investors. Recently, the regulatory layer of the market has been fascinated by the “selection layer” of the New Third Board and the long-awaited New Third Board market has once again become active. At the press conference, Zhao Zhengping, vice chairman of the China Securities Regulatory Commission, elaborated on the reform of the New Third Board and said that stratification is the focus of the 2017 New Third Board reform. In addition, the New Third Board and the regional equity market will be promoted. Docking.

It is understood that on February 24, the number of listed companies reached 10,715. At present, the listed companies in the New Third Board have accumulated more than 290 billion yuan of equity financing, an increase of nearly 151 billion yuan compared with last year's more than 139 billion yuan. Zhao Zhengping said that this has improved the financing structure and enhanced the brand value, especially leading and driving social capital. Investment in start-up companies. Now the new three board market is already an important part of the multi-level market system. In the future, the new three board market has great potential to support the development of innovative, entrepreneurial and growing small and medium-sized enterprises.

Talking about the development of the New Third Board this year, Zhao Zhengping said that the New Third Board should achieve a big qualitative improvement on the basis of the accumulation of quantity. Through tiered management, the issue, transaction, investor access and supervision, string together various reforms, provide differentiated institutional supply for many listed companies, and further release the positive effects of the market. Focus on supporting the development of small and medium-sized enterprises with strong innovation ability, honesty and trustworthiness, standardized operation and broad prospects.

Since May and June 2016, the new three boards have been managed hierarchically. Up to now, the number of new three board basic layer enterprises is 9,766, and the innovation level is 949. In this regard, Zhang Ding, chairman of Xinding Capital, said in an interview with Beijing Business Daily that Zhao Zhengping’s hierarchical management is likely to be the stratification of the selection layer. The main purpose of this is to improve the liquidity of the New Third Board.

Zhang Chi said that after the introduction of the innovation layer, the institutional dividends on the introduction of funds on the innovation level, including the public fund entry and trust insurance funds, have entered the innovation layer. If the supervisory layer separates a “selection layer” on the innovation layer, the quality of the “selection layer” enterprise is relatively good, so the risk is relatively small, and it is easy to introduce some system dividends for differential development. Improve the liquidity of the New Third Board.

Keyword 5: “Science and Technology Innovation Enterprise”

Recently, some media reported that the China Securities Regulatory Commission is considering providing a quick channel for some domestic large-scale technology companies IPO (IPO) to help them skip the long queue for applying for listing, thus stimulating companies to list in China. In the article, the media also listed companies such as Ant Financial, Zhongan Online Insurance and Qihoo 360 are expected to obtain a shortcut to the China Securities Regulatory Commission. At the press conference, some media reporters asked Liu Shiyu about the relevant issues such as “the CSRC considered making some local financial technology companies easier to list on the mainland market”, and Liu Shiyu also responded to this.

Liu Shiyu said, "As long as it is a technology-driven innovation model that is conducive to the restructuring and transfer of the national economy, it is conducive to the promotion of supply-side structural reforms. We all support their financing in the capital market. The capital market is open to embrace these. Enterprise.” However, Liu Shiyu also said that “the choice of listing is the autonomy of the company, and the China Securities Regulatory Commission respects the company’s choice of listing.” Liu Shiyu said that the same capital can be raised in overseas listings, and it can also be effective. Supervision is also conducive to improving corporate governance.

In this regard, Yingda Securities chief economist Li Dazhao believes that Liu Shiyu's statement is mainly for the Internet, high-tech leading enterprises that can not meet the listing conditions of the A-share market. "For example, some high-quality start-up companies can not meet the profit requirements of the listing, etc., and the regulatory authorities may have special arrangements." Liu Shiyu also stated at the press conference that the domestic capital market related system is also being revised, for example, Enterprises in the main board IPO have three years of profit requirements, financial technology companies often can not meet this condition, and now the GEM, the new three board are in line with this situation.

According to an analyst from a small investment institution in Beijing, for the current listing process, it usually takes 2-3 years for the company to get the approval approval list from the queue to the final, and if it is adjusted for some special enterprises, , may give a certain "care" in the timing. "But this arrangement also needs to take into account the issue of market fairness, such as what kind of companies are qualified to take shortcuts, etc., should have a detailed set of criteria." The analyst said.

Keyword six: "barbarians"

Liu Shiyu also responded to hot topics such as “barbarians” that the market is concerned about.

Liu Shiyu said that "barbarians", "fairy", "harmful people", "predators", these people's behaviors are often draped in legal cloaks, playing the system's edge ball, in the capital market, arrogant, eroding the vast majority The legitimate rights and interests of small and medium investors. The function of the CSRC is to supervise and cannot sit idly by. "The primary task of the CSRC is to supervise. If there is a second task, it is also supervision, and the third task is supervision." Liu Shiyu believes that only by legal supervision, comprehensive supervision, and strict supervision can we maintain open, fair and just. In the market order, without the "three public" principle, there is no protection for the rights and interests of investors. Without the "three public" market order, the legitimate rights and interests of small and medium-sized investors will not be effectively protected.

It is worth noting that recently, insurance institutions such as Qianhai Life Insurance experienced severe penalties issued by the regulatory authorities, and Yao Zhenhua, then chairman of Qianhai Life Insurance, was also given a penalty of dismissal of the qualifications and banned from the insurance industry for ten years. In the opinion of a securities analyst who does not want to be named, the strict punishment of the relevant insurance institutions by the regulatory authorities indicates the regulatory attitude towards the illegal capital. "It is not that the insurance is the 'barbarians' that Liu Shiyu said. The 'barbarians' mainly refer to the malicious capital that makes waves in the capital market and harms the interests of small and medium investors. Their existence is not conducive to the maintenance of the "three public" principle of the capital market. Said the analyst.

A private equity source in Beijing also said that the regulators imposed high-pressure supervision on “barbarians” and “capital predators”. The main purpose was to maintain market order and prevent malicious capital from harming the real economy. "For example, some capitals rely on capital advantages for hostile takeovers, which may affect the stability of the management of listed companies, which in turn leads to instability in the performance of listed companies, which essentially hurts the interests of the majority of small and medium investors." Said.

Beijing Business Daily reporter Dong Liang Gao Ping Liu Fengru / text CFP / map Han Yu / watchmaking