The Root Causes And Countermeasures Of Frequent Turnover Of China Securities Regulatory Commission

The fundamental reason for the formation of A share "policy market" is that any place where marketization and rule of law are backward will lead to administrative control instead of market decision and administrative supervision instead of governing the city according to law.

In a word, China's stock market has been overly administrative.

Liu Shiyu, chairman of the original Agricultural Bank of China, served as secretary and chairman of the CPC Committee of the China Securities Regulatory Commission. Xiao Gang, currently chairman of the securities and Futures Commission, left office.

First of all, I would like to thank President Xiao Gang for his great efforts and contributions to the reform of China's stock market during his term of office, and congratulate president Liu!

If the stock market plummeted, the stockholders demanded or threatened the government to rescue the market. If the shareholders lost their money, they would scold the SFC and even directly abuse the chairman of the SFC and attack and abuse their families.

Acting as chairman of the SFC in such a stock market is like sitting on the "Volcano" and being barbecued at any time and even trying to make a fire. How dare and who can sit on such a table for a long time? Two or three years away, such a short term of office, how to maintain continuity of policy and the full implementation of the ruling concept?

Since its establishment in October 1992, the China Securities Regulatory Commission (CSRC) has only 23 years of history, but it has already been the 8 chairman of the SFC.

In addition to Shang Fulin's longer term, the other 6 presidency is less than 3 years.

Obviously, such a high frequency replacement is very rare in any country. What is the reason? What does this mean?

Being chairman of the China Securities Regulatory Commission is a high-risk occupation.

He will bear the abuse and personal attack from the vast majority of shareholders who lose money at any time. This is not acceptable to ordinary people.

Because investors may have to dig up the eighteen generations of their ancestors to insult and abuse. What kind of "policy city" is this? How do we cultivate such a large shareholder?

"Policy city" kidnapping the securities and Futures Commission, which is the most important feature of A shares.

No matter who is in charge of the SFC, they may face personal adversity and insults.

This is China's unique "policy market".

Question: which country's shareholders will abuse the supervisors and their leaders at will? Only China! Because China's stock market is a typical "policy market".

The direct reason for the formation of A share "policy market" is that A shares are typical "retail markets". In order to protect small and medium-sized investors, the government is forced to overtake and over administrative intervention, resulting in the result and fact of "going overboard". Which company is entitled to IPO? Whether it has the value of investment, all of which are approved by the government, endorsed by guarantee, and investors have no right to speak with the market.

At the same time, when the company is IPO and how high the IPO price is, the government has the final say. For example, the government can decide to suspend IPO at any time and close the primary market. The government stipulates that the IPO price can not exceed 23 times the issue price earnings ratio, so the IPO price of all companies is 22.99 times.

In addition, the government does not allow ordinary investors to take part in the new market. Only the holders of "market capitalization" are allowed to participate in the purchase of new shares, which is the "ticket supply" in the planned economy era.

What is even more ridiculous is that all new shares must rise by 44% on the first day of the IPO, and they must continue trading on the next N trading days until the stock price reaches 100 yuan or 200 yuan in a single breath.

This is the absurdity and jokes of the A share market policy.

Ever remember? In June 2009, the A share market tried the IPO market for the first time.

At that time, in the big bear market, we not only practiced the marketization of IPO rhythm and the marketization of IPO pricing, but also all investors could participate in the new market, no market value requirement, and there was no price limit on the first day of IPO. As a result, the myth of "unbeaten new shares" was broken for the first time, "breaking new shares" became the norm, and the first level market became the market of income and risk for the first time.

This is a real market-oriented reform of IPO.

Unfortunately, in the middle of October 2012, after more than three years of market reform, in the middle of October 2012, when the Shanghai Composite Index fell below 2000, the SFC suddenly ordered the "suspension of the IPO". This means that the IPO market reform started in June 2009 was suspended, so we went back to the old road before 2009, and further strengthened the government's administrative control over the market.

Obviously, this is a retrogression of market-oriented reform, but some people argue that it is "error correction", which fully demonstrates the stubbornness and strength of the "policy market". It can not tolerate the stock market volatility brought about by the "marketization" reform. As long as the stock market plummeted, investors threatened the government to "suspend IPO" because it was unable to bear the pressure of enormous public opinion from the market investors, including abuse and personal attacks, and had to be forced to close the primary market.

Until the beginning of 2014, restart IPO again.

Forced to abandon the IPO market approach, instead of intensifying the IPO administrative control.

First, restore the IPO rhythm control, approve the release according to the plan; secondly, restore the window guidance to the IPO pricing, the price earnings ratio should not exceed 23 times; again, the old practice of restoring the market value of the new shares will not be new to the holder of the market value; finally, the opening limit of the first day of the new stock market is restored, and the limit is limited to 44%.

This is the compromise and retrogression of reform, but it is helpless and forced.

Obviously, "policy market" is the biggest chronic disease in the A share market.

It not only abducted the SFC and the chairman of the SFC, but also formed the personal attachment relationship between the shareholders and the SFC.

What is the "policy market"? When the SFC independently focuses on market supervision and crackdown on securities crimes, our SFC must go all out to see the stock market go up and down and ready to fight for the fire market.

In this way, our SFC will not be able to focus solely on market regulation, crack down on securities crimes, and fail to maintain the coherence and integrity of the reform.

Such a policy led directly to the high frequency of changing hands. A chairman was in office for two or three years, basically familiar with the market and formed a complete reform idea. As a result, he had to leave again. The new chairman had to spend two or three years to understand the market situation, and then came up with his own reform plan. The same result, he would have to leave and new posts in two or three years.

That's how it works.

We must resolutely break down.

The imprisonment and bondage.

Marketization and rule of law reform are the tools to break the policy market.

Without marketization reform, the decisive role of the market can not be exerted. Government control will inevitably take the place of it. Similarly, without the rule of law reform, the rule of man instead of the rule of law, administrative regulation instead of governing the city by law, this pattern can not be changed.

Therefore, in addition to marketization and rule of law reform, China's stock market has no second way to go.

From Guo Shuqing to Xiao Gang, the securities and Futures Commission has always stressed that the main line of reform is marketization, rule of law and internationalization.

Marketization and rule of law are the basis and prerequisite for international reform. Internationalization reform is the inevitable result of marketization and rule of law.

Three pformations must be coordinated and coordinated, and the three should be unified and balanced.

President Liu will continue unswervingly along the path of "three oriented" reform after taking office, but the key is to need courage and wisdom to tackle difficulties, eliminate resistance to reform and accelerate the process of reform, which requires leaders to shoulder the risk and cost of reform and replace their personal honor and disgrace.

At present, the most critical step in the market-oriented reform is to implement the IPO registration system on the ground, restore the basic attributes of the market, and let the market players return to their respective positions and take their own responsibilities. This reform needs to overcome market resistance and pressure; and the most crucial step in the reform of the rule of law is the amendment of the securities law, how to convict and measure the crime of securities crimes, whether it is necessary to let criminals go bankrupt, to sit down at the bottom and to introduce a class action mechanism.

In addition, the internationalization of China's capital market reform is advancing synchronously. The expansion of QFII and QDII, the expansion of Shanghai and Hong Kong, the trial of Shenzhen and Hong Kong through Shanghai, and the introduction of the international board are all unavoidable problems in the future internationalization reform.

We look forward to Chairman Liu's greater determination, confidence and courage to reform, to have better reform ideas and administration ideas, and to have a longer term of office. I wish China's stock market a better tomorrow.