From China Securities RegulatoryCommission
At the Central Economic Work Conferenceheld at the end of last year, General Secretary Xi Jinping clearly stated thatit is necessary to create a standardized, transparent, open, dynamic andresilient capital market, and to make arrangements for improving the quality oflisted companies. Since the beginning of this year, General Secretary XiJinping has made important instructions on preventing and defusing the risks oflisted companies, deepening capital market reforms, and enhancing the abilityof serving the real economy. This is the fundamental follow-up to strengthenthe construction of the capital market and do a good job in the supervision oflisted companies. The CSRC and all relevant parties in the market mustprofoundly study and understand and fully implement them.
First, improving the quality of listedcompanies is the inherent requirement of the company's own development
Listed companies are excellentrepresentatives of Chinese companies and the pillars of the Chinese economy.Only by continuously improving the quality of listed companies and enhancingthe value creation and value management capabilities, can companies stand outin the increasingly fierce market competition and win a long-lasting reputationin a respectful way, truly becoming the backbone of hundreds of millions ofcompanies. "Excellent students." With the deepening of reform and openingup and the development of the capital market, the number of listed companies inChina has grown steadily and the quality has continued to improve. It plays anincreasingly important role in the structural reform of service supply and thehigh-quality development of the economy.
Listed companies are the "basicdisk" of the real economy. As of the end of April, there were 3,627domestic listed companies with a total market capitalization of about 60trillion yuan, ranking first in the world. Listed companies cover all 90 majorsectors of the national economy, accounting for more than 70% of the top 500domestic enterprises. In 2018, the total profit of listed companies wasequivalent to 38% of the industrial enterprises above designated size in the sameperiod. The profitability of listed companies was significantly higher than thenational average. It can be said that more than 3,600 listed companies are the“component index” of the Chinese economy, which reflects the overall stabletrend of the macro economy.
Listed companies are the"converters" of economic development momentum. The capital market hasgradually become the main channel for mergers and acquisitions and the mainbattlefield for stocks and revitalization. The transaction amount of M&A andrestructuring of listed companies has increased from 1.45 trillion yuan in 2014to 2.56 trillion yuan in 2018, accounting for 60% of the total domesticM&A. Leap into the world's second largest M&A market. At the same time,the capital market has played an irreplaceable role in optimizing the capitalformation mechanism, improving the property rights system, and inspiring thevitality of innovation. By the end of April, there were 1,425 listed companiesin strategic emerging industries, accounting for 39% of all listed companies.In 2018, the R&D expenditure of listed companies was 734.4 billion yuan, ayear-on-year increase of 21%. A group of innovative and growing companies haveachieved rapid development with the help of the capital market.
Listed companies are the"vanguards" that improve the modern enterprise system and fulfillsocial responsibilities. More than 3,600 enterprises have been transformed intopublic companies through the issuance and listing, and gradually established amodern enterprise system and corporate governance norms, which provided a modelfor the modernization of Chinese enterprises and also provided support for theChinese economy to participate in international competition. At the same time,listed companies actively practice new development concepts, fulfill theirsocial responsibilities, and play a leading role in the coordinated developmentof service areas, green development, “One Belt and One Road”, ruralrevitalization, poverty alleviation, and military-civilian integrationdevelopment. For example, in the 2018 annual report, 1,235 companies disclosedenvironmental protection information; 1,170 companies disclosed accuratepoverty alleviation information, and the poverty alleviation investment was55.2 billion yuan.
Listed companies are "newchannels" for investors to share the economic growth dividend. In recentyears, the return of investors in listed companies has increased, and thenumber and size of cash dividends have increased year by year. In 2018, 2,787listed companies implemented cash dividends with a total amount of 1.15trillion yuan. The dividend yield increased from 1.85% in 2014 to 2.41% in2018, which is roughly equivalent to the S&P 500 Index and the Dow JonesIndustrial Index.
In the process of capital marketdevelopment, the CSRC has always adhered to the principle of "twounwavering", adhered to the principle of competitive neutrality, andactively supported the development of private enterprises. From 2016 to 2018,the number of listed companies and financing of private enterprises accountedfor 89% and 72% of the total market respectively. The number of refinancinghouseholds and financing of private listed companies accounted for 70% and 45%of the total market respectively. At present, there are 2,544 private listedcompanies, accounting for an increase of 55% from 2012 to 70%, and privateenterprises in strategic emerging industries account for 75%.
Despite the external uncertainty, thisyear, China's economy has achieved a smooth start, the main indicators haveremained within a reasonable range and better than expected, the new economicmomentum has accelerated, the development coordination has been effectivelyenhanced, and the market expectation has improved significantly, indicatingthat the Chinese economy is stable. The characteristics of toughness and largespace for maneuvering. As a country with neat industrial factors, strongproduction capacity and huge domestic demand potential, China is fullyqualified and capable of doing its own thing well. This is where ourconfidence, confidence and strength are, and also for the health of the capitalmarket. Development and listed companies have provided excellent opportunitiesfor excellence and strength. It is hoped that listed companies will be able toseize opportunities, meet challenges, and strive for progress, and continue toplay a good role in promoting the economy and its own high-quality development.
Second, the quality of listed companiesis the cornerstone of the sustainable development of the capital market
Recently, due to external factors, thestock market has certain fluctuations, but in the long run, it is the economicfundamentals and the quality of listed companies that determine the market'squality and development trend. The capital market is a “barometer” of the realeconomy. This function is mainly reflected in the quality of listed companies.The capital market is the link between the entity and the capital, theconnecting financier and the investor. The quality of the listed company is thepillar and cornerstone of supporting the market, and is the micro foundationfor promoting the virtuous circle of finance and the real economy. Without agood listed company, there can be no good capital markets.
The quality of listed companies isrich, including operational benefits, accounting basis, governance capabilitiesand information realities. Improving the quality of listed companies is a grandsystem project, which is inseparable from the concerted efforts and wisdom oflisted companies, regulators, investors and market participants.
(1) Improving the quality of listedcompanies is an important mission of the company. As the main body of themarket, listed companies are responsible for the direct responsibility andfirst responsibility of self-regulation, self-improvement and self-improvement.To promote the sustainable and healthy development of the capital market, theregulatory authorities should be "four fears." For listed companies,they must also remember and adhere to the "four awes," especially themajor shareholders and listed companies. heart of. Practice has proved that allconfrontation with market rules and laws and regulations, fear of risk, anddamage to investors will inevitably be punished by the market and the law, andwill pay a heavy price.
First, we must respect the market,respect the law, and take the road of steady and compliant development. As alisted company, we must fully understand the market, respect the market, adaptto the market, and act according to market rules. In recent years, some listedcompanies have a low-key mentality, quick success, blind expansion andleverage, a large number of large shareholders pledge shares, and some haverepeated pledges and cyclic pledges. When the macroeconomic and financialenvironment changes, the risk of debt and the risk of pledge will come to thefore. This is the inevitable result of not respecting the market and violatingthe laws of the market. I hope that the major shareholder and the listedcompany’s director Dong Gao will learn from the lessons and will respect themarket and respect the law throughout. They will continue to operate steadilyand prudently, and match development and risk control capabilities. Majorstrategic mistakes and deviations occur, and the strength is maintained and thestability is achieved.
Second, we must respect the rule oflaw, abide by the rules, and strengthen the spirit of the integrity contract.For any company, law-abiding operations and compliance operations are insurmountablebottom lines. In particular, listed companies should set an example incompliance with laws and regulations. However, in reality, a small number ofmajor shareholders and listed company directors are highly indifferent to thelaw-abiding, rule-conscious, and contractual spirits, telling lies, makingfalse accounts, manipulating performance, and manipulating mergers andacquisitions; some corporate governance is not standardized, through illegalaffiliate transactions Deliver benefits. These violations violate the market'sconfidence, and ultimately hurt the company's own development, and it is notworth the candle. It is hoped that the major shareholder and the listedcompany’s director Dong Gao will adhere to the laws and regulations as the criterion,and conscientiously study and abide by the laws and regulations such as theSecurities Law, the Company Law and the Criminal Law, and earnestly abide bythe rule of law, respect law, law-abiding usage, and integrity. regulation.
Third, we must respect the profession,highlight the main business, and consciously stay away from the chaos of themarket. Listed companies with outstanding main business, excellent performanceand strong core competitiveness are often the high-quality investment targetsin the market and the mainstream value logic. However, there are also a fewlisted companies that deviate from their main business, and they are eager tocompose stories, speculate concepts, engage in unrealistic cross-border mergersand acquisitions, and frequently change financing purposes. This is not onlybad for the company's stable long-term development, but also harms investors'interests. , disrupting market order. It is hoped that the major shareholderand the listed company's director Dong Gao will adhere to the correctdevelopment concept, take root in the entity, train the internal strength,highlight the main business, and develop the professionalism, carry forward theentrepreneurial spirit and the spirit of artisans, eat with competitiveness,and promote the original source of the market.
Fourth, we must respect investors,return investors, and actively practice the equity culture. Listed companiesand investors are the symbiotic co-prosperity of the market. Only listedcompanies that understand and respect investors will win market recognition andrespect. However, some listed listed companies do not pay dividends all theyear round; some large shareholders use their own control to reach out tolisted companies, and short-listed companies through illegal guarantees andcapital occupation; some listed companies lack social responsibility. Illegalsewage discharge, production and marketing of counterfeit products, the impactis bad. These acts infringe on the interests of listed companies and investors,and also cause harm to the public interest. In the end, investors are “votingwith their feet”. It is hoped that the major shareholder and listed companydirector Donggao will be able to respect investors, especially small andmedium-sized investors, to actively understand their demands, continue tooptimize the investor return mechanism, and be the bottom line, responsible,responsible and respected enterprise.
Improving the quality of listedcompanies is the primary goal of listed companies. Giving investors a real,transparent and compliant listed company and promoting the quality of listedcompanies is the fundamental means to protect the legitimate rights andinterests of investors. The supervision of listed companies by the regulatoryauthorities must be strengthened and cannot be weakened. The focus ofregulation is on corporate governance, including information disclosure andinternal controls. Through the strengthening of corporate governance, we willpromote the improvement of business management. Through continuous supervisionand precise supervision, we must improve the quality of information disclosureof listed companies, urge listed companies and major shareholders to tell thetruth, make real accounts, promote truth and truth, do not engage in imaginaryand false, refuse to lie, and do not violate the law.
To strengthen the supervision of listedcompanies, we must adhere to dialectical thinking and bottom-line thinking,respect the law, maintain the determination, and comprehensively grasp theinternal unity of multiple regulatory objectives. First, adhere to bothsupervision and service. Supervision is the main responsibility of theregulatory authorities and cannot be shaken at any time. The CSRC system andthe management unit should make greater efforts to strengthen the supervisionof listed companies and provide supervision in services. Through effectivesupervision, continuous supervision, classified supervision, and scientific andtechnological supervision, the market mechanism is improved, the marketenvironment is optimized, market expectations are stabilized, and the qualityof service supply to the real economy and enterprises is improved. The secondis to adhere to both norms and development. The goal of regulation is to ensurethe sustainable development of the capital market. It is necessary to supervisethe enterprise's compliance management, establish a modern enterprise systemwith sound internal control and effective governance, guide enterprises to bebetter, stronger, and lasting, and build a century-old store with a long-termfoundation, and continuously enhance the vitality of the micro-subject of thecapital market. The third is to insist on the parallelism of trust andgovernance. The capital market is not only a capital market but also aninformation market. Information disclosure is the lifeline of this market, justas "oxygen" is as important to people. Effective corporate governanceis a prerequisite for ensuring the quality of information disclosure and animportant indicator for measuring the quality of listed companies. Through openand transparent information disclosure, investors can see and see listedcompanies better, and achieve better "by hand and foot vote", whilestrengthening supervision and restraint on major shareholders and listedcompanies. His loyalty is on duty.
To strengthen the supervision of listedcompanies, we must proceed from the national conditions and market conditions,and make overall plans to improve the relationship between regulatoryefficiency and regulatory quality. Implementing classified supervision is thebasic method. It is necessary to adhere to the principle of managing small andgood management, distinguishing situations, highlighting key points, andsupervising. For high-quality listed companies that continue to standardizeoperations, they should provide more conveniences in financing, mergers andacquisitions, and enhance the endogenous driving force of enterprisedevelopment. For companies with frequent chaos, companies and risk companiesshould focus on and strictly supervise and do Two ends, with the middle."Reengineering process reengineering is an important foundation. It is necessaryto further improve the "three points and one line" supervision mechanismof listed companies, promote the effective connection between administrativesupervision and self-regulation, daily supervision and audit punishment,on-site supervision and off-site supervision, and construct a pre-, post-, andpost-chain supervision mechanism. To achieve a regulatory barrier forward.Strengthening scientific and technological supervision is an effective means.It is necessary to adhere to application orientation, problem orientation andregulatory orientation, promote the construction of a unified listed company'sbig data platform, realize the interconnection and cross-validation ofinformation, and enhance the ability of clue discovery, analysis and earlywarning. Increasing the cost of non-compliance is a core initiative. Activelypromote the revision of the "Company Law", "Company Law"and "Criminal Law" and the formulation of relevant judicialinterpretations, innovate law enforcement means, study and optimize theinstitutional mechanisms such as public condemnation, subrogation, awards andreports, increase disciplinary efforts, enhance supervision and shock, and letThose who do bad things must pay the price and let the lucky ones stop in time.
Since the beginning of this year, theCSRC has filed 28 cases against listed companies and related entities,including 13 capital expenditures and 12 violations. Listed companies and majorshareholders must firmly hold the "four bottom lines": one is not todisclose false information, the other is not to engage in insider trading, thethird is not to manipulate stock prices, and the fourth is not to damage theinterests of listed companies. In contrast to the "four bottomlines", listed companies should seriously carry out self-examination andself-correction. For serious problems, refusal to rectify or rectification, theCSRC will comprehensively use regulatory measures, administrative penalties,market bans, criminal transfer and other means to investigate theresponsibility of the company, especially the major shareholder, the listedcompany’s director, and the actual controller.
To improve the quality of listedcompanies, it is necessary to create a good ecology. The more the merrier. Thecapital market is an ecological system. To improve the quality of listedcompanies, all parties must work together to build a good ecology.
The first is to optimize thedevelopment of the ecology. Under the unified command and coordination of theFinancial Committee of the State Council, the CSRC will actively strengthencommunication and cooperation with relevant ministries and commissions, improvethe institutional mechanisms that are conducive to improving the quality oflisted companies, and strive to enhance policy synergy. Strengthen informationsharing with local party committees and governments, and jointly exploreeffective ways to improve the quality of listed companies. Further strengthenthe close cooperation with the public security inspection and other organs,increase the punishment for violations of the lawful rights and interests ofinvestors, and actively create a rule of law environment for the standardizeddevelopment of listed companies.
The second is to optimize theintermediary ecology. Intermediaries such as sponsorship underwriting, auditevaluation, and legal services should be responsible for their duties,effectively play the role of “gatekeeper” in the capital market, strictlyperform statutory duties such as verification and verification, professionalchecks, and urge listed companies to operate and disclose truthfully. For thosewho fail to diligently perform their duties in the course of practicing, oreven collude with relevant entities such as listed companies, they will conducta double investigation and will not tolerate them.
The third is to optimize the ecology ofpublic opinion. The capital market is a market of “information + confidence”.The CSRC will continue to strengthen regulatory transparency and stabilizemarket expectations. The media is welcome to report on the reform anddevelopment of the capital market in a comprehensive, accurate and objectivemanner, pay attention to the production and operation and standard operation oflisted companies, and play a role of public opinion supervision to promote thequality of information disclosure by listed companies. At the same time, themedia is also welcome to provide valuable comments and suggestions on thesupervision work.
The fourth is to optimize culturalecology. A healthy and mature corporate culture, investment culture andregulatory culture are the foundation for the stable development of the capitalmarket. China's capital market started late and developed rapidly. The rule oflaw integrity and contract spirit still need to be further deepened, and themarket culture needs further accumulation and precipitation. The CSRC will workwith all parties in the market to accelerate the construction of capital marketculture and create an excellent "soft environment" for improving thequality of listed companies.
3. Deepening the supply-side structuralreform of the capital market is the only way to promote the high-qualitydevelopment of the real economy and listed companies.
Deepening the structural reform of thefinancial supply side is a fundamental measure to improve the economic abilityof financial services and to win the battle against financial risks. Inaccordance with the requirements of deepening the structural reform of thefinancial supply side, we must accelerate the comprehensive reform of thecapital market and open up to the outside world, adhere to the same emphasis onboth increments and stocks, and improve the market entry and export, andincrease the stocks to achieve market-based survival and the fittest. Continueto improve the quality of listed companies and promote the healthy developmentof the capital market with key institutional innovations.
(1) Based on incremental optimization.Adhere to the quality of listed companies from the source, to prevent thedisease from entering the mouth. Promote the establishment of the science andtechnology board and the pilot registration system to start smoothly, trulyimplement the securities issuance registration system with informationdisclosure as the core, improve the transparency and efficiency of the auditwork, enhance the inclusiveness of the issuance and listing standards and thepredictability of policies, and form a replicable Promote institutionalinnovation. At the same time, we will promote the reform of the relevant listedsectors, smooth the multi-level capital market mechanism, and attract morehigh-quality enterprises from all walks of life to go public. Continue tomaintain the normalization of IPO, adhere to the competition of neutrality, notonly ownership, not only the size, not only the industry, only the advantagesand disadvantages, and earnestly choose the best.
(2) Deepening stock reform. Drawing onthe experience of mature markets, we will expand exports, classify andimplement policies, and smoothly resolve stock risks while introducing goodimports and introducing high-quality companies. Implement the action plan toimprove the quality of listed companies, focus on the synergy effect of allparties, and strive to use a few years to improve the quality of listed companies.Give full play to the role of the market "invisible hand", improvethe mechanism of mergers and acquisitions, bankruptcy and reorganization,support high-quality assets injected into listed companies, and inject"fresh blood" into the quality and efficiency of listed companies. Itis necessary to explore innovative ways of delisting and realize various formsof delisting channels. Enterprises that seriously disrupt market order andtouch the delisting standards resolutely withdraw from the market, retreat tothe end, and promote "zombie enterprises" and "shellcompanies" to clear out in time.
(3) Improve the basic system. Based onthe fundamental tenet of serving the real economy, in accordance with thereform direction of market-oriented legalization, on the basis of fullinvestigation and research, moderately optimize a series of systems such asrefinancing, mergers and acquisitions, reduction, and spin-off, and vigorouslydevelop direct financing, especially Equity financing will further improve theefficiency of capital formation and help alleviate the problem of “fundingdifficulties and expensive financing”.
Since its establishment seven yearsago, the Association of Chinese Listed Companies has fulfilled itsself-discipline and responsibilities, widely listened to members' voices,reflected member demands in a timely manner, continued to strengthen membertraining, actively guided members to standardize operations and fulfill socialresponsibilities, and did a lot of productive work. The company's quality hasplayed an important role, and the results are worthy of full recognition. TheCSRC will, as always, support the association to carry out its workindependently according to the law, strengthen self-discipline management,improve member services, play a good role as a bridge, and make newcontributions to the quality improvement of China's listed companies and thestable and healthy development of the capital market!