China’s State Council has released a new guideline aiming to strengthen regulation, forestall risks, and promote the high-quality development of the capital market. This marks the third such guideline from the State Council in two decades, following previous releases in 2004 and 2014.
The guideline emphasizes the need to build a secure, regulated, transparent, open, dynamic, and resilient capital market. It outlines efforts focused on enhancing regulation, preventing risks, and pushing forward high-quality development to fully harness the functions and roles of the capital market. This initiative is expected to contribute significantly to the building of a strong financial sector and serve the broader goal of advancing Chinese modernization.
Key measures include strict regulation on entry into the capital market through securities issuance and listing, as well as rigorous and sustained oversight of listed firms. The guideline also calls for intensified regulation on delisting procedures and oversight of institutions like securities and fund management companies.
Furthermore, efforts will be made to tighten supervision over high-frequency trading and other trading types. The guideline highlights the importance of enhancing reserves of strategic forces and further developing stabilizing mechanisms to ensure market stability.
In an effort to boost the intrinsic stability of the capital market, the impacts of both major economic and non-economic policies on the capital market will be factored into policy orientation consistency evaluations.
China will vigorously guide the entry of medium and long-term capital into the market, comprehensively deepen reform and opening up, and strengthen the rule of law in the capital market. These steps are aimed at fostering a more robust and resilient financial ecosystem that can support the nation’s economic ambitions.
Reference(s):
China to strengthen capital market regulation, risk prevention
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