Wu Qing: Intensify the implementation of a more inclusive system for IPOs and mergers & acquisitions.

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In the recently published “Reader's Guide to the ‘Suggestions of the CPC Central Committee on Formulating the 15th Five-Year Plan for National Economic and Social Development’”, CSRC Chairman Wu Qing published a signed article entitled “Improving the Inclusiveness and Adaptability of the Capital Market System”. Wu Qing clarified the key tasks and measures to improve the inclusiveness and adaptability of the capital market system during the “15th Five-Year Plan” period.

Strengthen the implementation of a more inclusive IPO and M&A system

Wu Qing pointed out that we must adhere to being goal-oriented and problem-oriented, focus closely on improving the capital market's functions of coordinated investment and financing, further comprehensively deepen capital market reforms, and continuously improve the inclusiveness, adaptability, attractiveness, and competitiveness of capital market systems.

First, support technological innovation with greater effort. Adapt to characteristics of technology firms such as high R&D investment, great operational uncertainty, and long profit cycles, and step up the implementation of more inclusive IPO, M&A and restructuring systems, and conscientiously advance the “five key financial articles”.

Second, better meet investors’ diverse wealth management needs. Adhere to an investor-oriented approach, focus on building a multi-layered, three-dimensional market system and product-service matrix, continually broaden channels for medium- and long-term capital to enter the market, and consistently enhance investors’ sense of gain.

Third, more precisely and efficiently strengthen supervision and risk prevention. Stay up to date with domestic and international capital markets’ innovation and development trends, improve the scientific and effective nature of regulation, reinforce technology-empowered regulation, enhance risk monitoring, warning and response capacities, and steadily maintain and invigorate capital markets.

Creating a More Attractive “Long-term Capital, Long-term Investment” Institutional Environment

Wu Qing pointed out the need to create a more attractive “long-term capital, long-term investment” institutional environment. Continue to actively create conditions to build a market environment in which various types of medium- and long-term capital “want to come, can stay, and develop well”, and promote the establishment and improvement of long-cycle assessment mechanisms for all types of medium- and long-term capital, and increase investment scale and proportion in A-shares. Steadily push forward public fund reform, promote the implementation of assessment and incentive mechanisms that link to investor interests, vigorously develop equity public funds, and propel high-quality development of index investment. Facilitate smooth “fundraising, investment, management, and exit” cycles for private equity and venture capital funds, and strengthen the cultivation and expansion of patient, long-term, and strategic capital.

Advance Institutional Reform Centered on Market and Public Needs

Wu Qing pointed out that improving the inclusiveness and adaptability of capital market institutions must always embody the political and people-centered attributes of capital market work. Center institutional reform around market needs and public demands, more effectively protecting investors’—especially small and medium investors’—legitimate rights and interests; better coordinate investment and financing development, paying attention to overall quantitative balance and focusing more on continuous qualitative improvement, helping resident savings accelerate their transformation into social investment, steadily optimizing financing structure, and promoting coordinated development of primary and secondary markets.

The Major Significance of Improving Capital Market System Inclusiveness and Adaptability

Wu Qing pointed out that improving the inclusiveness and adaptability of the capital market system is of great significance; it is an urgent requirement to better serve the development of new quality productive forces; it is the proper meaning of ensuring development achievements benefit the broad masses; it is an inevitable requirement to promote high-quality development of capital markets and build a strong financial nation; it is an important component of constructing a higher-level open economy.

Improve the Mechanisms for Tech Firm Screening and Price Formation

Wu Qing pointed out that we should use deepening reform of the STAR Market and ChiNext as breakthroughs, actively develop multiple types of equity financing, and improve full-chain, whole life-cycle service capabilities for real-economy enterprises. Further improve mechanisms and systems for the identification and screening and price formation of technological innovation enterprises, providing more accurate and effective support for quality companies seeking IPOs.

Continuously enhance the professional service capabilities of intermediary agencies to high standards. Vigorously develop private equity and venture capital funds. Improve the multi-level bond market system, vigorously develop tech innovation bonds, green bonds, etc., and steadily develop REITs and asset securitization. Optimize the futures product layout and industrial service functions.

Greater Efforts to Optimize the Structure and Enhance the Value of Listed Companies

Wu Qing pointed out that listed companies are the foundation of the capital market. Greater efforts must be made to further optimize the structure of listed companies and enhance investment value. Continue deepening M&A market reforms, increasing the flexibility and convenience of refinancing mechanisms, supporting listed companies in transformation and upgrading, making them better and stronger, developing new quality productive forces, and helping to cultivate more world-class enterprises.

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