The Third Plenary Session: Perfecting the System to Support the Development of Small and Medium Enterprises

Building a multi-level capital market service transformation and upgrading to protect the interests of investors

The top-level design of the forthcoming Third Plenary Session of the 18th CPC Central Committee for the capital market will become one of the most concerned topics in the current market.

The capital market issues that have been of concern to the Third Plenary Session have been closely aligned with the real economy. Industry insiders expect that the Third Plenary Session of the 18th Central Committee is expected to be more in the development of the capital market. At the moment when “stable growth, structural adjustment, and transformation” have become an urgent task for economic development, building and improving a multi-level capital market and effectively serving the transformation and upgrading of the real economy will become an important issue in the capital market. Promoting the construction of legalization, protecting the interests of investors to maintain market fairness, and preventing financial risks may become topics of concern to the capital market at this meeting.

After the meeting, a series of reform measures in the capital market, which are highly concerned by the market, are expected to be launched, with a focus on supporting small and micro enterprises, development of securities industry, futures innovation, and bond market development. The industry hopes to become a new capital market. A round of prosperity and development of the "new country nine articles."

Capital market development closely follows the overall situation of the economy

Although the recent three-China Plenary Sessions have different expressions about the capital market, the overall thinking closely matches the overall economic situation.

The Third Plenary Session of the Seventeenth Central Committee focused on the capital market. The meeting pointed out that maintaining economic stability, financial stability, and stable capital markets, maintaining a stable overall social situation, doing a good job in safeguarding and improving people's livelihood, and continuing to promote sound and rapid economic and social development.

The "Decision of the Central Committee of the Communist Party of China on Several Issues Concerning the Improvement of the Socialist Market Economic System", which was deliberated and adopted at the Third Plenary Session of the 16th CPC Central Committee, clearly established a multi-level capital market system, improved the capital market structure, and enriched capital market products. Standardize and develop the main board market, and promote the construction of venture capital and the GEM market. Actively expand the bond market, improve and standardize the issuance procedures, and expand the scale of corporate bond issuance. Vigorously develop institutional investors and broaden the channels for compliance funds to enter the market.

Establish a unified and interconnected securities market and improve the trading, registration and settlement systems. Accelerate the development of market factors such as land, technology and labor. Standardize the development of property rights transactions. Actively develop the property, life insurance and reinsurance markets. Steadily develop the futures market.

Analysts believe that the "Decision" addresses the issue of capital markets in such a large part, which is the first time in the major programmatic documents concerning China's economic reform and development. This is because, with the development of China's economy, the importance of the capital market is gradually reflected. The demand for funds for economic development has become an irresistible burden for China's indirect financing, and direct financing must be vigorously promoted.

Despite the large differences in the relevant statements of the Third Plenary Sessions, it is not difficult to see that the importance of the capital market is gradually increasing.

Do a good job in transformation and upgrading

Compared with five years ago, the economic situation at home and abroad has undergone tremendous changes. Because of this, the market is full of expectations for the capital market in the Third Plenary Session of the Third Plenary Session, and hopes that the relevant expressions will be more generous, which will lay a policy framework for the development of the capital market.

"Transformation and upgrading is a big article in China's economy at present, and it is also the core issue of the real economy." Analysts said that the situation of financial and capital markets seeking stability under the impact of the external market five years ago is very different. At present, China's economy is more urgent. The problem stems from how to “stable growth, adjust structure, and promote transformation”. As an important part of the overall economic situation, the capital market must improve the construction of multi-level capital markets and contribute to the realization of this goal. "Not only the capital market, but the development of the entire financial market is inseparable from this main line. The three middle schools will hope to make relevant statements on capital markets and even financial markets from this perspective."

The report of the 18th National Congress of the Communist Party of China has put forward "to deepen the reform of the financial system, improve the modern financial system that promotes macroeconomic stability, supports the development of the real economy, and accelerates the development of multi-level capital markets."

The relevant personage said that the Third Plenary Session may continue this line of thinking. From this perspective, the capital market will support the economic transformation and restructuring. This can be seen from the recent measures and related statements of the CSRC. Since the beginning of this year, the CSRC has accelerated the construction of a multi-level capital market system, accelerated the development of SME boards and the GEM, initiated pilot projects for the transfer of SMEs' shares and private-funded loans for SMEs, and adopted a filing system for non-listed SMEs. However, this is only part of the capital market's support for the development of small and medium-sized enterprises. The next step is to introduce a combination of boxing.

First of all, the expansion of the New Third Board to the national launch soon, on the basis of cleaning up and rectification of various trading venues, the CSRC will support securities companies to provide listed company recommendation, equity agent trading and other services for small and medium-sized enterprises through the regional equity transfer market. According to market statistics, the total number of companies registered and established by China under the company law is nearly 1 million, which means that the scope of capital market services will be greatly expanded.

Second, the CSRC is promoting securities companies to conduct asset management, direct investment, asset securitization and other businesses to support the development of small and medium-sized enterprises. Regarding the obstacles arising in the business process of asset securitization, the China Securities Journal reporter was informed that the CSRC is planning to further coordinate and improve relevant laws and regulations and taxation policies, optimize the review process, and continuously improve the efficiency of examination and approval under the premise of risk control.

In addition, since the beginning of this year, new varieties of futures such as eggs, thermal coal and treasury bonds have emerged in an endless stream. Next, the CSRC will steadily promote the innovation of commodity futures varieties, providing an effective tool for small and medium-sized enterprises to manage risks and find prices. Focus on guiding small and medium-sized micro-agricultural enterprises to carry out cooperative insurance, pricing services, warehouse receipts and other services through agricultural futures, and improve their risk management capabilities.

Improve institutional arrangements and support the development of small and medium-sized enterprises

Finally, the CSRC will further improve the institutional arrangements for small, medium and micro enterprises. On the one hand, it will optimize the GEM access standards, establish a GEM refinancing rules system, and form a “small, fast, flexible” financing method suitable for small and medium-sized enterprises; on the other hand, it will expand the pilot scope of SME private debt. To better meet the financing needs of small and medium-sized enterprises.

The CSRC also plans to promptly introduce the non-listed public company's targeted issuance rules, timely introduce non-listed public company mergers and acquisitions management measures, support small and medium-sized enterprises equity financing, share transfer, asset restructuring and other activities.

Maintain market fairness

Protect the interests of investors

Analysts expect that the promotion of legalization, the maintenance of market fairness, the protection of investors' interests and the protection of financial risks are all expected to become relevant contents of the discussion of capital market development at the Third Plenary Session.

Earlier, the CSRC spokesperson said in response to market rumors that the Securities and Futures Commission is brewing the "New China Nine Articles", he said that he is promptly implementing various state-level work arrangements on the capital market, and is carrying out daily supervision work while It has long-term and strategic research on issues, strengthens top-level design, and promotes the direction of marketization, legalization, and internationalization.

Market participants say the task of legalization is arduous. At present, the CSRC is taking the lead and participating in the revision of the Securities Law of the National People's Congress Financial and Economic Committee and the legislation of the Futures Law, and strives to incorporate these two tasks into the legislative plan for the National People's Congress next year. The revision of the Securities Law will broaden the scope of capital market services and the space for innovation, which is of great significance to both the real economy and the financial industry. However, this work is difficult to achieve overnight and will certainly become one of the key tasks of the CSRC in the next few years.

Under the background of the further advancement of the legalization of the Securities Law, the importance of protecting the interests of investors to effectively safeguard market equity is expected to be further enhanced. Xiao Gang, chairman of the China Securities Regulatory Commission, has clearly stated that it will “move the focus of work to strengthen supervision and enforcement and protect the legitimate rights and interests of investors, especially small and medium investors”.

Analysts believe that it is not difficult to see the strength and determination of the CSRC to maintain market fairness from the cases of heavy punch enforcement such as the Wanfushengke case and the Everbright Incident. Behind the law enforcement of heavy punches, in addition to protecting the interests of investors, it is closely related to the maintenance of financial security. The Everbright incident shows that there are still loopholes in the financial sector that cannot be ignored. In terms of anti-blocking loopholes, capital market instruments such as treasury bonds futures are expected to play a key role.

For the next development plan of the capital market, a more comprehensive top-level design blueprint will be disclosed in the “New Country Nine Articles” that are under consideration. In addition to the above-mentioned points, it will be an important part to become a bigger and stronger organization. At present, the three major industries of securities companies, funds and futures are writing long-term plans for ten years. Among them, the securities company plans to build a modern investment bank and propose a ten-fold growth goal for ten years. This will also become an important part of the long-term development of the capital market.

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