CHINA: Regulatory Changes of SSE in Concepts, Efficiency, Transparency

Thursday May 30 2013

On 25 May 2013, the Shanghai Stock Exchange (SSE) held a news briefing to announce its future trends of self-regulation. It was reported that the SSE is aiming to further transform regulatory concepts, improve regulatory efficiency, and step up disclosure in regulation, while cracking down on the alleged violations of laws and regulations on the securities market in a bid to further establish the regulatory authority.

As a key market player and self-regulator, the SSE will make effective efforts in three aspects in the future. In the aspect of transforming the regulatory concepts, the SSE will further relax restrictions and strengthen the regulation so as to make all the market players “fully responsible in their places”.

With regard to further improving regulatory efficiency, the SSE will try to avoid the overlapped regulation which will increase the regulatory costs. Internally, the SSE has set up the “Regulatory Committee” to coordinate the work in self-regulation. Externally, the SSE has given further support to the China Securities Regulatory Commission (CSRC) and its agencies, industry associations, and other relevant departments and institutions, and strengthened the coordination mechanism. The SSE has also further rationalized the processes and rules, streamlined procedures, and enhanced the rapid response mechanism.

With respect to further stepping up the disclosure and transparency in regulation, it means not only disclosing the rules of the SSE’s self-regulatory management, publicly soliciting opinions from all market players in instituting the rules, and accepting the supervision of the market, but also disclosing the results, procedures, and processes of the regulation.

In addition to the promotion of the work in the abovementioned three aspects, the SSE will crack down on the alleged violations of laws and regulations on the securities market in a bid to further establish the regulatory authority. At present, the SSE is revising its rules for disciplinary punishment by centralizing the relevant provisions previously implemented in the fields related to listed companies, market supervision, and others, constantly enriching and improving the regulatory means and measures, and reinforcing the punishing means. As for abnormal fluctuations in the market, the SSE will “investigate every case and never leave any violation of laws or regulations unaccountable”.

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