The Second Anniversary Of The Opening Of The Science And Technology Innovation Board

"I understand that the process of promoting the registration system reform is essentially a process of gradual marketization of China's capital market and gradual development and maturity of infrastructure." On June 10, Chu Xiaoming, chairman of Shenwan Hongyuan securities, said at the 13th Lujiazui forum.

On June 13, 2019, at the opening ceremony of the 11th Lujiazui forum, the China Securities Regulatory Commission and the Shanghai Municipal People's Government jointly held the opening ceremony of the science and Technology Innovation Board of Shanghai Stock Exchange, and the science and technology innovation board officially opened. Two years later, at the 13th Lujiazui forum, the participants again discussed the new ecology of China's capital market under the registration system reform.

Opening a new era of capital market construction

"The registration system reform has opened a new era for the construction of China's capital market." Chu Xiaoming pointed out in his speech that through the reform of the registration system, the state has attached great importance to the capital market to an unprecedented degree.

In Chu Xiaoming's view, on the one hand, the registration system reform has promoted the comprehensive reform of the basic system of the capital market. Taking the registration system reform as a breakthrough point, we have accelerated a series of systematic institutional reforms, such as delisting, trading, dividend distribution, and information disclosure of refinancing, breaking the previous single soldier breakthrough reform“ The reform of these capital markets pays special attention to marketization, legalization, top-level design and risk prevention. It is a systematic project and a strategic reconstruction of the new ecology of the capital market. "

On the other hand, the registration system reform has also improved the ability of the capital market to serve the real economy. Chu Xiaoming believes that the registration system reform has speeded up the solution to the problem of "no shortage of funds and capital" faced by China. With the help of flexible and diversified direct financing tools, we can reduce leverage, improve the debt structure, and give full play to the mechanism of capital market income sharing and risk sharing to prevent and resolve financial risks.

According to public information, as of the end of May this year, there were 282 listed companies on the science and technology innovation board, with an IPO financing amount of more than 360 billion yuan and a total market value of nearly 4.1 trillion yuan, accounting for 64% of the number of IPO companies in the Shanghai market in the same period, 61% of the financing amount and 8% of the total market value.

The reform of the registration system has also led to the changes of domestic listing audit mechanism. Liu Shaotong, deputy general manager of Shanghai Stock Exchange, said at the forum that at present, the overall time from acceptance to review by the municipal Party committee of the science and technology innovation board is 156 days, which is close to the mature overseas market. It allows eligible unprofitable enterprises to list for financing, and allows red chip enterprises with special equity structure to be listed on the market, which meets the financing needs of different types of science and technology innovation enterprises.

In fact, it is obvious to all that the registration system has brought about changes in China's capital market. Thomas gottstein, CEO of Credit Suisse Group, pointed out that the reform of registration system helps to boost the confidence of investors, which is proved by the significant increase of foreign investment in A-shares in recent years. As of May 2021, the market value of a shares held by foreign investors is nearly 3 trillion yuan, accounting for about 8% of the free circulation market value of a shares, more than double that of two years ago.

Thomas predicted that in the future, the participation of foreign investors in China's market will further increase, and it will gradually approach mature markets such as the United States, Japan and the United Kingdom. With the relaxation of foreign capital market access channels, China can further learn from and use the successful experience of international financial institutions and global capital markets.

Promoting the transformation of scientific and technological achievements

From a broad perspective, the reform of registration system has also brought far-reaching impact on China's macro level.

"The registration system can be said to be the key reform that has had the most profound impact on the investment banking business in the past two years." Huang Zhaohui, CEO of CICC, also pointed out at the forum that with the steady progress of the registration system reform, the equity financing function of the capital market will be further optimized and improved. The improvement of capital market efficiency has two positive effects on the macro level, one is the supplement of macro capital, the other is the transformation of science and technology.

Huang Zhaohui believes that the supplement of macro capital is the core of long-term sustainable and healthy economic development. In addition to "subtraction" work such as bad debt and risk assets treatment, the most important supplementary channel is equity financing in capital market.

"From the specific data, the total amount of A-share IPO is not much. Last year's 470 billion yuan has been the second highest IPO Financing scale in the history of A-share, which can be translated into more than 60 billion US dollars. However, the IPO of the United States last year was 180 billion US dollars, basically three times that of a shares. This has something to do with the low marketization rate of domestic capital." Huang Zhaohui believes that there is still a big gap between the amount of financing in the equity market and becoming an influential macro capital supplement channel. With the steady progress of the registration system in the future, the relevant gap will gradually narrow, and a more fluent, more market-oriented and more institutionalized capital supplement method will be formed.

"The state can invest in basic science, but how can it be transformed into technologies and products that can promote efficiency, productivity and competitiveness?" Huang Zhaohui believes that the combination of capital market and science and technology is needed to continuously stimulate the production of innovation and create long-term competitiveness in the field of science and technology.

Various institutional arrangements still need to be improved in practice

It can be said that with the continuous progress of the reform, the concept of registration system with information disclosure as the core has been increasingly rooted in the hearts of the people. The sense of responsibility of market subjects has been significantly enhanced. The survival of the fittest mechanism has been further improved. Breakthroughs have been made in the supply of market rule of law. The channels for investor protection have been more unblocked. Market expectations have been significantly stable. The overall market ecology has shown positive changes.

In his keynote speech at the Lujiazui forum, chairman Yi Huiman said that the establishment of the science and technology innovation board and the pilot registration system is groundbreaking and groundbreaking. Various institutional arrangements need to be continuously developed and improved in practice. Some new situations and new problems appear in the reform, which is inevitable for the science and technology innovation board to mature.

Recently, there are market voices saying that IPO issuance has been tightened. In this regard, Yi Huiman reiterated that "IPO issuance has neither tightened nor relaxed."

Yi Huiman said frankly, in terms of issuing rhythm, we need to comprehensively consider the market bearing capacity, liquidity environment and the coordinated development of the primary and secondary markets, and actively create the IPO ecology in line with the market expectations. However, according to the data released by him, the number of IPOs has maintained a rapid growth in the past three years. In the first five months of this year, 196 IPO companies raised more than 150 billion yuan, up 111% and 37% respectively year-on-year.

"It should be said that IPO continues to maintain the normal issuance, and the growth rate is still very fast. Why does it feel tightening?" Yi Huiman thinks that there may be several factors: first, the implementation of the requirements of the new securities law has made the responsibilities of intermediary agencies more solid; Second, strengthen the supervision of shareholders' information disclosure and clarify the relevant requirements such as penetration verification; Thirdly, according to the principle that substance is more important than form, the evaluation system of scientific and technological innovation attributes has been improved and comprehensive research and judgment has been strengthened.

Yi Huiman pointed out that the relevant measures are mainly to create conditions for the steady promotion of the registration system reform in the whole market, and are also necessary for handling the relationship between the registration system reform and the improvement of the quality of listed companies. At the same time, it is also conducive to preventing the disorderly expansion of capital and maintaining the open, fair and just issuing order.

Chu Xiaoming also pointed out at the forum that, compared with the mature capital market, there are still gaps in the inclusiveness of the issuance system, the marketization of the pricing and allocation system, and the professional ability of intermediaries.