CSRC chairman backs improved delisting system

10 March 2014   Category: News, Asia, China, Global   By Asia Asset Management

The China Securities Regulatory Commission (CSRC) is looking to push ahead with delisting system reforms to further regularise Mainland stock market operations, according to a report from Shanghai Securities Journal

Speaking at the second session of the 12th National People’s Congress, CSRC Chairman Xiao Gang noted that the regulatory watchdog is studying ways in which to further liberalise and diversify the existing delisting mechanism.

"The delisting system is one of the most important and fundamental regulations in China's capital market," he said.

Mr. Xiao called for policy changes that would make it easier for shares delisted from mainstream exchanges to trade in the over-the-counter market. He added that such shares could regain their exchange listings when they meet the standards.

According to the stock exchanges in Shanghai and Shenzhen, since the delisting policy was introduced in 2001, fewer than 80 companies have left the public stock transaction boards. Of those, only 49 companies were delisted because of their financial performance, accounting for less than 2 percent of the total A-share issuers.

Furthermore, Mr. Xiao noted that CSRC is likely to propose a registration system of stock issuance in 2014, saying the system will be executed gradually once the Securities Law is fully optimised.

The CSRC chairman went on to stress the need to promote acquisitions and reorganisations involving public enterprises and encouraged the development of specific funds for mergers and acquisitions. Mr. Xiao also emphasised the need to curb insider trading and protect the interests of smaller investors.