On December 6, at the eighth member conference of the Securities Association of China, Wu Qing, chairman of the China Securities Regulatory Commission, delivered a speech on the high-quality development of the securities industry.
Appropriately relax restrictions for high-quality institutions and moderately expand capital space and leverage limits.
Wu Qing pointed out that securities companies should leverage their own resources, play to their comparative advantages, and further enhance their ability to integrate resources by making full use ofMergers and acquisitionsrestructuring mechanisms and tools to achieve efficient allocation of strengths, with the aim of forming several investment institutions with significant international influence during the '15th Five-Year Plan' period.
Wu Qing noted that being top-tier is not exclusive to large institutions; small and medium-sized institutions should also capitalize on their strengths by concentrating resources in niche fields and key regions to create small yet specialized investment banks and service providers. Regulatory policies will also encourage differentiated supervision, particularly relaxing restrictions for high-quality institutions, moderately expanding capital space and leverage limits, and improving the efficiency of capital utilization.
A few problematic brokerages must be subject to strict regulation according to law.
Wu Qing emphasized that for small and medium-sized brokerages and foreign brokerages, differentiated supervision will be explored in terms of classification evaluation and market entry to promote specialized development while ensuring fairness. A few problematic brokerages will be strictly regulated according to law, and violations will be punished severely in accordance with legal provisions.
The A-share market has achieved reasonable growth in volume and an effective improvement in quality.
Wu Qing stated that since the beginning of this year, the A-share market has generally been active, with its market capitalization exceeding 100 trillion yuan starting from August, achieving reasonable growth in volume and effective improvement in quality.
Wu Qing highlighted that securities firms are the most critical bridges linking all parties in the capital markets and play a vital role in improving market functions and ecosystems. The total assets of securities companies have reached 14.5 trillion yuan, with net assets of approximately 3.3 trillion yuan, showing growth of over 60% and 40%, respectively, in more than four years. They have facilitated the listing of more than 1,200 technology innovation enterprises. The structure of the securities industry continues to optimize, including landmark cases such as the smooth integration of Guotai and Haitong, where the effect of '1+1>2' has initially been realized. Small and medium-sized institutions have made breakthroughs by focusing on specific segments, transitioning toward differentiation and specialization. Foreign institutions are accelerating their domestic business layouts, further advancing opening-up, with 11 wholly foreign-owned or controlled companies actively conducting business in China.
Continuously enhance the adaptability and competitiveness of the securities industry.
Wu Qing emphasized that only by adhering to the main themes of risk prevention, strengthened regulation, and promoting high-quality development, and by consistently innovating while upholding principles and staying relevant, can the securities industry continuously improve its adaptability and competitiveness, thereby maintaining stability and achieving long-term success in a complex and ever-changing environment.
Wu Qing pointed out that, in comparison to the intrinsic requirements of high-quality economic and social development, the overall strength of the securities industry needs to be enhanced, with shortcomings in professional competence and innovation capabilities. The compliance and risk control systems require further improvement, and the industry's cultural development needs strengthening. It is essential to acknowledge these deficiencies, persist with sustained efforts, and strive for progress.
Securities firms need to reinforce their sense of mission in four key areas.
Wu Qing emphasized the need to grasp the mission and responsibilities of the securities industry during the '15th Five-Year Plan' period. Investment banks and securities firms should play a pivotal role: first, by strengthening their mission in serving the real economy and the development of new quality productive forces; second, by better serving investors and reinforcing their mission in optimizing household asset allocation; third, by taking on greater responsibility in accelerating the strengthening of the financial system; and fourth, by enhancing their mission in promoting high-level institutional openness.
The securities industry must improve its service to the real economy and new quality productive forces.
Wu Qing noted that the new generation of technological revolutions, represented by artificial intelligence, biomedicine, and green energy, is accelerating breakthroughs. In this process, the role of enterprises as innovation drivers has become more prominent. Securities firms, which connect the capital market with real enterprises, possess solid and comprehensive research systems, specialized value assessment, and risk pricing capabilities. They play an irreplaceable role in identifying enterprise innovation potential, matching investment and financing needs, and supporting industrial mergers and acquisitions. This forms the micro-foundation for price discovery, resource allocation, and function performance in the capital market. Serving the real economy and new quality productive forces is a mission bestowed upon the securities industry by the times.
Securities firms should provide products conducive to long-term and value investing.
Wu Qing pointed out that under the new socio-economic structural changes, securities firms and investment institutions demonstrate clear professional advantages in equity investment, price discovery, and risk management. They must cater to the diversified needs of investors with varying risk appetites, scales, and investment horizons by offering richer, more precise, and more suitable products for long-term and value investing, fostering mutual growth and shared success with investors.
Securities firms should consciously uphold market order and practice value investment principles.
Wu Qing highlighted that recent changes in the securities industry indicate a shift from simply pursuing scale and profit expansion to prioritizing functionality. This positive trend should be further consolidated, firmly abandoning the simplistic competition based on scale, growth rates, or rankings.
Wu Qing stated that achieving high-quality development in the securities industry requires focusing on serving the real economy as the fundamental task, optimizing business structures, and innovating product tools. Around the five major themes of finance, resources such as capital, talent, and technology should be allocated strategically, highlighting support for the development of new quality productive forces. A deep analysis of the integration trends between technological and industrial innovation should be conducted to enhance product precision. Securities firms must proactively assume their social responsibility to protect investors' legitimate rights and promote market stability and prosperity. Bearing in mind that individual investors constitute the majority of the market, they should maintain market order and adhere to the principles of fairness, impartiality, and transparency. Practicing value investment principles, they should strengthen cross-cycle and counter-cyclical strategies, leverage the expertise of chief economists and industry analysts, narrate the story of China's stock market effectively, and create a positive public opinion environment.
Securities firms must shoulder the responsibility of being 'gatekeepers,' ensuring strict scrutiny at the IPO entry point and providing comprehensive support throughout the process.
Wu Qing pointed out that the securities industry must take on the role of 'gatekeeper,' from maintaining rigorous controls at the IPO entry point to offering full-process support, guiding listed companies toward standardized operations and value enhancement. It is essential to strengthen capabilities in value discovery and cultivation, reinforce business synergy, and enhance the professionalism and influence of IPOs and mergers and acquisitions. Deep involvement in corporate value creation is required, with a focus on strengthening unified construction in underwriting, sponsorship, and pricing to promote balanced and coordinated development between primary and secondary markets. Financial management capabilities must be improved to accelerate alignment with investors' interests, expedite the establishment of an evaluation system centered on investor returns, and drive the transformation and development of brokerage services and comprehensive wealth management. Comprehensive support in terms of products, trading, market-making, and risk management must be provided for various types of long-term funds, while improving the ecosystem for long-term investment. A commitment to high-level outbound expansion and high-level inbound introduction should also be maintained.
Securities firms must continuously innovate financial products on the basis of controllable risks.
Wu Qing noted that the securities industry operates at the forefront of the market economy. On the basis of controllable risks, it must continually innovate financial products to better meet the needs of various investors and market demands. Currently, financial technology innovation is burgeoning and profoundly changing, even reshaping, the financial market ecosystem. Industry participants must be adept at adapting, responding to changes, and seeking change, actively researching, and steadily exploring the deployment and application of technologies such as artificial intelligence, big data, and blockchain in capital markets.
Editor/Doris