Introduction
I Latest Rules and Regulations
1. The SSE and SZSE issued regulatory guidelines on issuance and underwriting misconduct
On September 28, 2023, the SSE and SZSE each released the Regulatory Guidelines for Violations in Issuance and Underwriting (Trial) (the" Guidelines"). The Guidelines apply to securities issuers, their controlling shareholders, actual controllers, senior management, securities firms, securities service institutions, investors, and directly responsible supervisors and other liable individuals. The Guidelines mainly clarify: (1) self-regulatory or disciplinary actions that the exchanges may take against parties violating rules related to securities issuance and underwriting, along with relevant consideration factors; (2) typical violations by securities issuers, underwriters, securities service institutions, and investors, as well as their corresponding handling procedures; and (3) special inspection procedures for issuance and underwriting.
Building on the Guidelines, the SSE and SZSE put into practice a comprehensive 'full-chain' regulatory and accountability framework for issuance and underwriting. By defining the typical violations and penalties in each phase of the issuance and underwriting process, they enhance regulatory standardization and transparency, thereby guiding all market participants toward compliance.
2. The SSE, SZSE and BSE published detailed standards related to share reduction activities
The above share reduction notices and guidelines issued by the SSE, SZSE, and BSE further clarify the execution standards of the New Share Reduction Rule. The core concept behind these new notices and guidelines links the share reduction activities of controlling shareholders and actual controllers to company dividends and share prices. In the current market environment, this helps to prevent significant share price fluctuations in the secondary market due to share reduction activities. It is beneficial for the long-term stable development of listed companies and the protection of small and medium investors' rights. However, it may also continue to impact future choices of listing venues and the design of shareholding structures for companies.
3. The SSE, SZSE and BSE issued notices on matters concerning program stock trading
4. The AMAC released three guidelines for the filing of private investment funds, along with a list of supporting materials
5. The Shenzhen Municipal Financial Regulatory Bureau issued the Measures for the Pilot Program of Shenzhen Qualified Foreign Limited Partners (Draft for Comment)
Currently, the QFLP pilot policy has been implemented in 23 regions nationwide. The amendment to Shenzhen's QFLP pilot policy incorporates the latest national macro policies and private equity industry regulatory requirements. It is expected to further loose the restrictions on the establishment and investment aspects of QFLP, elevate the financial openness of Shenzhen, and offer other cities an adaptable and universally applicable "Shenzhen experience" for their own QFLP/QDIE (Qualified Domestic Investment Enterprise) pilot schemes.
II Industry News
1. The PBOC along with other relevant authorities, have decided to optimize the pilot program for "Cross-boundary Wealth Management Connect Scheme" in the Guangdong-Hong Kong-Macao Greater Bay Area, further facilitating financial market connectivity in the region
On September 28, 2023, the PBOC, the NAFR, and the CSRC announced that Mainland financial regulatory authorities, along with those in Hong Kong and Macao, have decided to optimize the pilot program for "Cross-boundary Wealth Management Connect Scheme" in the Guangdong-Hong Kong-Macao Greater Bay Area. The main optimizations include: (1) refining investor access conditions; (2) expanding the scope of participating institutions to include eligible securities companies as new participants; (3) extending the range of qualified investment products for "Southbound Connect" and "Northbound Connect"; (4) moderately increasing the individual investment quota; (5) further optimizing cross-boundary marketing and sales arrangements. Going forward, the financial regulatory authorities in Mainland, Hong Kong, and Macao will revise and improve the relevant implementing details or operational guidelines to facilitate the early implementation of these measures. Meanwhile, they will continue to optimize the " Cross-boundary Wealth Management Connect Scheme" based on the pilot's performance.
The pilot program for " Cross-boundary Wealth Management Connect Scheme" in the Guangdong-Hong Kong-Macao Greater Bay Area has been in operation for two years. This round of optimization aims to further promote financial market connectivity in the Greater Bay Area and better meet the diversified needs of investors.
2. The CSRC released a plan to optimize the securities trading model for public fund managers
In mid-September 2023, the CSRC issued Optimizing the Securities Trading Model of Public Fund Managers (the “Notice”). The Notice emphasizes improving the convenience level of brokerage trading models and allows all types of public fund managers to autonomously select and optimize brokerage trading models based on their own business development needs. The specific measures include promoting a reduction in the procurement costs of trading system modules and continuing to strengthen the supervision of securities trading behavior of public fund managers. It is reported that financial institutions such as insurance companies and insurance asset management companies, pension fund investment management organizations, commercial banks, and their managed products will apply to the optimization plan for this securities trading model by analogy.
Experts believe that optimizing the securities trading model will further reduce the operating costs for small and medium-sized public mutual fund managers, encouraging them to focus on improving core capabilities such as investment research. It will also enhance the service capabilities of the brokerage trading model, promoting the entry of medium and long-term funds from banks and insurance companies into the market.
3. The PBOC and NAFR identified 20 domestically systemically important banks
On September 22, 2023, the PBOC and NAFR announced that they had carried out the 2023 assessment of China's systemically important banks and identified 20 domestic systemically important banks. Among these are six state-owned commercial banks, nine joint-stock commercial banks, and five city commercial banks. They are divided into five groups based on their systemic importance scores, from low to high (no bank has entered the fifth group for now).
The assessment for 2023 adds the Bank of Nanjing as a systemically important bank (in the first group) compared to 2022. The aforementioned systemically important banks must comply with the regulations set forth in the Provisions on the Additional Regulation of Systemically Important Banks (Trial), including additional capital, additional leverage ratio requirements, the formulation of recovery and resolution plans, information reporting and disclosure, and corporate governance requirements.
4. The PBOC lowered the reserve requirement ratio as well as the foreign exchange reserve requirement ratio for financial institutions
Beijing ICP No. 05019364-1 Beijing Public Network Security 110105011258
