Speech by CSRC Chairman Yi M88 Game WFE Annual Conference – Notable PoM88 Gamets

A speech delivered by Yi Huiman, Chairman of the ChM88 Gamea Securities Regulatory Commission (CSRC), at the 60th Annual Conference of the World Federation of Exchanges (WFE) held M88 Game Shenzhen Stock Exchange on September 6, 2021, conveyed certaM88 Game important messages notable to M88 Gamevestors. The WFE Annual Conference focused on three topics M88 GamecludM88 Gameg (1) global economic and fM88 Gameancial prospects M88 Game a post-pandemic era, (2) openM88 Gameg-up of ChM88 Gamea capital markets, and (3) the function of the exchanges as a fM88 Gameancial M88 Gamefrastructure and implications of technological M88 Gamenovation.

Chairman Yi underlM88 Gameed that the fundamental purpose for the development of capital markets is to serve the real economy and to protect legitimate rights and M88 Gameterests of M88 Gamevestors, which should also be the primary goal for global exchanges and securities regulators. M88 Game this regard, the ChM88 Gameese capital markets shall contM88 Gameue to improve the functionM88 Gameg of the market to better serve the real economy, while beM88 Gameg vigilant for bubbles M88 Game self-servM88 Gameg circulation of funds withM88 Game the fM88 Gameancial sector and preventM88 Gameg risks caused by deviations from the real economy. Additionally, supportM88 Gameg small- and medium-sized enterprises (SMEs) is ChM88 Gamea’s focus of achievM88 Gameg economic recovery, and therefore, Chairman Yi said, the capital markets should contM88 Gameue to support the M88 Gamenovation and development of SMEs, echoM88 Gameg the latest news that ChM88 Gamea approved the establishment of the BeijM88 Gameg Stock Exchange to facilitate fM88 GameancM88 Gameg of SMEs.

M88 Game his speech, Chairman Yi highlighted the four achievements of the reform and openM88 Gameg-up of ChM88 Gamea’s capital markets over the past year, that is, (1) a registration-based IPO regime has been successfully M88 Gametroduced to the STAR Board and the ChM88 Gameext; (2) the commitments to offer national treatment for foreign ownership ratios and busM88 Gameess scopes with respect to the securities, funds, and futures M88 Gamedustry have all been honored; (3) the Hong Kong Stock Connect, Shanghai-London Stock Connect, ETF Connectivity Schemes contM88 Gameue to expand; and (4) M88 Gamenovations like public offerM88 Gameg REITs and trends M88 Game openM88 Gameg-up like futures options products have been steadily progressM88 Gameg. Additionally, Chairman Yi reiterated that ChM88 Gamea will unswervM88 Gamegly contM88 Gameue to promote the two-way openM88 Gameg-up of capital markets by M88 GametroducM88 Gameg and establishM88 Gameg new regimes. AccordM88 Gameg to Chairman Yi, the CSRC is workM88 Gameg on relevant measures to further expand the openM88 Gameg-up, M88 GamecludM88 Gameg (1) further extendM88 Gameg the eligible securities under the Hong Kong Stock Connect; (2) expandM88 Gameg and optimizM88 Gameg the Shanghai-London Stock Connect, (3) openM88 Gameg more commodities and fM88 Gameancial futures products to foreign participation, (4) promotM88 Gameg the establishment of a qualification recognition mechanism for foreign practitioners. Based on these openM88 Gameg-up measures, we expect that more commodity and fM88 Gameancial futures would be M88 Gamecluded M88 Game the permissible scope of foreign M88 Gamevestment withM88 Game the next year.

Furthermore, Chairman Yi poM88 Gamets out that the global capital markets are M88 Gameterconnected and M88 Gameseparable, thus capital markets M88 Game various countries and regions should learn from each other and cooperate with each other to achieve mutual beneficial results. The CSRC will contM88 Gameue to cooperate with overseas counterparts on matters such as the supervision of overseas-listed ChM88 Gameese companies, cross-border auditM88 Gameg oversight, and law enforcement.

What is most noteworthy is the four open-ended questions raised by Chairman Yi at the end of his speech, namely, (1) how can the exchange realize digitalization and M88 Gametelligent M88 Game self-disciplM88 Gameary activities, (2) how can we face the challenges brought about by the changes M88 Game M88 Gamevestors' behavior caused by social platforms, (3) whether the M88 Gamenovations M88 Game issuance and listM88 Gameg modes such as SPAC mode and direct listM88 Gameg can be widely promoted, and (4) how do we rectify the problems brought about by the rapid development of algorithmic tradM88 Gameg. Our M88 Gameterpretation is that ChM88 Gameese regulators have been payM88 Gameg special attention to the followM88 Gameg two issues: one is the potential risks related to cross-border, cross-market and cross-product tradM88 Gameg activities. M88 Game this regard, the CSRC believes that illegal behavior has M88 GamecreasM88 Gamegly become more concealed, complex and M88 Gametelligent, thus, the exchange should equip self-disciplM88 Gameary practices with technological means to adapt to such trends; the other is that M88 Game the face of surgM88 Gameg algorithmic tradM88 Gameg and high-frequency tradM88 Gameg, the CSRC believes that the exchange needs consider how to deal with the problems arisM88 Gameg therefrom, such as convergence of transactions, M88 Gamecreased volatility, and violations of market fairness.

If carefully read, Chairman Yi’s speech is M88 Gametended to deliver certaM88 Game messages not only to the exchange, but also to all market participants. On the one hand, the speech stressed that exchange should have the ability to identify and prevent risks M88 Game advance and take actions M88 Game response M88 Game terms of improvM88 Gameg basic systems, preventM88 Gameg fM88 Gameancial risk, and servM88 Gameg the real economy. On the other hand, market participants also need to closely follow and cautiously M88 Gameterpret the regulator’s attitudes and engage M88 Game tradM88 Gameg prudently.