China’s Securities Authority Flags “Non-interference, Zero Tolerance” as Key Regulatory Themes for 2021

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China’s securities authority has outlined the tenor of its regulatory efforts for the upcoming year, with analysts forecasting a sizeable acceleration in the pace of initial public offerings (IPO’s).

The China Securities Regulatory Commission (CSRC) issued its “CSRC Party Committee Transmitting, Studying and Implementing the Spirit of Central Economic Work Conference” (证监会党委传达学习贯彻中央经济工作会议精神) document on 22 December, following the holding of China’s Central Economic Work Conference for 2020 from 16 – 18 December.

CSRC said that in 2021 it would maintain the key policy themes of “systems establishment, non-interference and zero-tolerance,” as well as “strengthen the development of capital market infrastructure, steadily raise the proportion of direct financing, endeavour to strengthen the hub function of capital markets, and make a positive contribution to driving the high-quality development of the economy.”

In terms of specific measures, CSRC said that it would seek to improve systems and mechanisms for capital markets to support tech innovation following the launch of the ChiNext board in Shenzhen and the STAR Market Board in Shanghai, as well as optimise refinancing and takeover and restructuring policies, and improve systems for employee share incentive schemes.

CSRC will also support the “hub function” of capital markets, “improve the development of a multi-tier capital market system, strengthen organic linkages between each tier of the equity market, and expedite improvements to financing structures.”

Data from Wind indicates that during the period from 1 January to 22 December 2020 China’s A-share market welcomed 376 new shares, including 137 on the STAR Market Board and 101 on ChiNext.

A report from Deloitte forecasts that 2021 will see 410 – 500 new A-shares that will raise between 520 – 640 billion yuan in funds.

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