Nine New Capital Market Reforms

China pledges to push ahead with capital market reforms

In a wide-ranging statement of policy principles, the State Council said it would develop a system for direct bond issuance by local governments, streamline the approval process for initial public offerings (IPOs), and remove some restrictions on the use of financial derivatives.

......The cabinet said it would create a system for direct bond issues by local governments. Currently, they are forbidden from directly selling bonds or borrowing from banks, but have skirted this ban by borrowing through opaque special-purpose vehicles.

......The State Council said it planned to allow some bonds to trade on both the interbank bond market and stock exchanges. Currently, the two markets are strictly segregated.

China Securities Journal has a bullish take on the reforms and the bulls think the market will bounce on Monday. There are also experts saying these reforms mark a big turning point for the market.

新“国九条”专题


Interpretation of a number of experts said the nine countries to usher in a huge turning point in the capital market

May 9 in the evening, the State Council issued the "Several Opinions on Further Promoting the healthy development of the capital market," the official arrival of nine new countries. And telecommunications networks to connect many economists launch of nine new countries were reviewed.

　　Hong Yuan Securities, chief economist for housing and universal telecommunications network, said the new country nine pairs of capital market development is the emergence of major new formulation. The development of multi-level capital market, the focus of the previous nine old country still falls above the norm, and the new country settled on nine more encouragement, which is a support and care attitude.

　　"For example, the current in the financial sector there were many financial innovations., If settled in the specification, then there will inevitably be pressure but now settled on the encouragement, you can bring a lot of opportunities because of financial innovation, are often in walking a fine line position, you can also say illegal, you can legally say if that norms, it will inevitably More decree violations, but stressed that encouragement, then we can make more financial innovations introduced. "

　　Housing universally believed that the introduction of nine new countries, the development of the capital market is definitely a major event, "the market will happen next great change."

　　Haitong Securities macro-manager of the Institute and telecommunications networks, said Li Mingliang, nine new countries in fact there are many legends have long been outside, originally scheduled for introduction late last year, is now only slightly in the introduction of the little people's expectations late means.

　　State nine new meaning, Li Mingliang think, especially the development of multi-level market, foster private market is the most meaningful. He believes that in the past some of China's capital market is indeed a single, raised funds in the majority, while the private equity market is small. In fact, based on the experience of foreign countries, is a private equity fund market occupies more than most. In fact, the public fund and not in line with the law more than the market, but also to a large extent the capital market is one of the reasons chaos.

　　Li Mingliang said that now actively cultivate the market introduction of private provision would be a significant change and opportunity, you can make it faster development of private markets.

　　Lida Xiao Ying Tai Securities chief economist, said the State Council officially released the new "National Nine," study co-ordinate tax policies conducive to further promote the healthy development of the capital market. Is the hope of many years of exceptionally good. Nine new countries committed to protecting investors, especially small investors' legitimate rights and interests. Optimizing investor returns mechanism, improve dispute resolution and investor diversification damages relief mechanism, this is most important.