SCIO briefing on actively encouraging the flow of medium- and long-term funds into the capital market and promoting its high-quality development

CCTV:

The implementation plan proposes to continuously optimize the capital market investment environment. What specific work is being done in this area?

Wu Qing:

I'll answer this question. Thank you. The CSRC has been working to build a sound market ecosystem where investment and financing develop in a coordinated manner, and all market participants fulfill their responsibilities and receive their due benefits. Since last year, the CSRC has earnestly implemented Several Opinions on Strengthening Supervision, Preventing Risks, and Promoting the High-Quality Development of the Capital Market, adhering to the principles of consolidating the foundation and intensifying supervision and regulation, respecting the laws of the market and complying with regulatory rules. The CSRC has placed emphasis on the construction of the basic systems of the capital market, improved the full-chain regulatory framework, formed a "1+N" policy system, and promoted the continuous improvement of the market ecosystem. Looking ahead, we will use the implementation plan as an opportunity to practice the investor-oriented philosophy, further increase policy supply, and strive to create a market ecology more conducive to long-term investment, value investment, and rational investment.

First, on the asset side, we are working to improve the quality and investment value of listed companies. Last year, we formulated market value management guidelines for listed companies, introduced policies and rules encouraging dividends and share buybacks. Listed companies paid 2.4 trillion yuan in dividends and conducted 147.6 billion yuan in buybacks throughout the year, both setting historical records. At the turn of the year, we resolutely implemented the new "National Nine Article" requirements regarding multiple dividend payments per year and pre-Spring Festival dividends. This year, many companies have already paid multiple dividends. Many companies also paid dividends before the Spring Festival, with eligible listed companies guided and encouraged to give investors Spring Festival bonuses through special dividend payments. Beyond that, 90% of profitable listed companies paid dividends last year. In the two months before this year's Spring Festival — December last year and January this year — more than 310 companies are expected to implement pre-Spring Festival dividends, with dividend amounts reaching approximately 340 billion yuan. The number of companies and total amounts represent 9 times and 7.6 times the same period last year, respectively. Currently, the dividend yield of the CSI 300 Index has reached 3%, significantly higher than the 10-year government bond yield, further highlighting the investment value of the equity market. We will also further strengthen oversight of market access and exit mechanisms, enhance the inclusiveness and adaptability of the capital market system, further increase the supply of high-quality listed companies, and support more benchmark high-tech enterprises in listing on the A-share market. Meanwhile, we will strengthen ongoing supervision of listed companies, particularly by further improving corporate governance and continuously enhancing the quality of information disclosure by listed companies. Additionally, we will take multiple measures to boost and activate the mergers and acquisitions market. Listed companies should also further enhance their awareness of proactively rewarding investors and improve their attractiveness through measures such as cash dividends, share buybacks with cancellation, and major shareholder share purchases, providing more high-quality targets for the market. This is an important foundation for the market.

Second, on the trading side, we are continuously enriching the supply of products and tools suitable for medium- and long-term investment. That means strengthening investment. Institutional investors, including public offering funds, commercial insurance funds, basic pension funds, annuity funds, and bank wealth management, will be allowed to participate more actively as strategic investors in the private placements of listed companies. Insurance asset management, bank wealth management, and public offering funds will receive equal policy treatment for new share subscriptions, private placements of listed companies, and recognition standards for significant share acquisitions. This supports more active market investment by these funds. We will make good and full use of the central bank's swap facilities and work with the PBC to explore the establishment of regular institutional arrangements.

Third, on the institutional side, we will promote the continuous improvement of professional service capabilities. We will support securities and fund management institutions in conducting M&A and restructuring according to market-oriented principles to build first-class investment banks and institutions. A first-class capital market requires first-class investment banks and investment institutions. Building investment banks and investment institutions will further enhance the comprehensive capabilities to serve new quality productive force and residents' wealth management. Since last year, some leading institutions have made substantial progress in M&A. We will also guide industry institutions to increase resource investment in personnel, research, trading and capital, enhancing their service capabilities for various types of medium- and long-term funds such as pension funds and commercial insurance funds, as well as their service capabilities for all investors. We will accelerate the improvement of the rules and regulatory framework for fund investment advisory services to facilitate the transition from the pilot phase to regular operation, thereby providing investors with better wealth planning and asset allocation services.

Fourth, on the enforcement side, we will resolutely maintain a fair, just and open market order. We will strictly implement regulatory requirements for rigorous and in-depth regulation that is sharp-edged and powerful, adhere to the combination of punishment, prevention and governance, and conduct law-based and classified supervision. We will crack down on all kinds of illegal and non-compliant activities in a swift, precise and forceful manner. Efforts will be made to both tackle problems in their early stages and focus on major and serious cases. Chief violators and those who harm investors' legitimate rights will be held fully accountable. These measures will further enhance the precision and effectiveness of regulatory enforcement. We will strengthen the protection of investors' legitimate rights, particularly those of small- and medium-sized investors. Targeted measures will be implemented to tighten constraints on the conduct of controlling shareholders and actual controllers of listed companies. This includes cracking down on and restraining illegal activities such as malicious financial fraud and serious infringement of the legitimate rights and interests of small- and medium-sized investors. We will promote the improvement of special representative litigation, party undertakings, and other institutional mechanisms, and accelerate the enhancement of investor protection systems and mechanisms during the delisting process, particularly for delistings due to legal violations.

In summary, building a sound capital market ecosystem is the shared expectation of all market participants and encompasses many areas. The CSRC is duty-bound and will do its best. We will make persistent and sustained efforts to improve the capital market ecosystem so that all types of funds are willing to enter this market and can stay and develop well here. Thank you.