Amendment Of Securities Law Should Not Avoid Registration System Reform

The twenty-seventh session of the twelve NPC Standing Committee, which was just concluded by the end of last month, carried out a second instance for the revised Securities Law.

According to the information disclosed by the conference, in the latest version of the revised Securities Law, which was submitted to the conference for consideration, the IPO registration reform, which had a high voice, has been weakened. That is to say, this reform has been shelved in the foreseeable time.

Although IPO registration system has been proposed for several years, it has been controversial.

Proponents believe that this reform can make China's capital market more market-oriented, and decide whether an enterprise can go public or not, and what price can be sold.

However, opponents argue that the IPO audit system can eliminate some obviously unqualified enterprises by administrative means, guarantee the quality of listed companies, and block the pressure of too many enterprises entering the market on the market.

Before the outbreak of abnormal stock market in the second half of 2015, management was supportive of the registration system reform, and even assumed that the registration system should be authorized by the National People's Congress before the amendment of the securities law. However, an abnormal fluctuation in the stock market changed all of this.

In this abnormal fluctuation that has reached the level of stock disaster, IPO registration reform is regarded as one of the disasters. Under the circumstances, the SFC once declared that it would not consider implementing the reform for the time being.

With the resumption of IPO suspended in abnormal fluctuations, the Commission has resumed its work, and the market seems to have accepted this reality.

However, when everything is back to the old road, we need to face up to a reality. With the shelving of registration system, the reservation of audit system has strong reasons.

The IPO system, which is a parasitic power, has had a sharp collision with the requirements of deepening the reform in an all-round way, and its harm to China's capital market has been concealed.

Some people oppose the implementation of the IPO registration system, mainly based on two concerns.

First, we are worried about the serious fraud of enterprises applying for IPO in the A share market. If there is no relevant department's audit, the registration of enterprises can be listed, this fraud will be more serious, and the interests of investors will be greatly affected.

Two, we are worried that our enterprises are too eager to cash in the market. Once registered, they can be listed. A large number of enterprises will enter the market to collect money, which will cause great pressure on the two level market, and finally make China's capital market fall into a long-term bear market.

However, these two concerns are not entirely consistent with the reality of China's capital market, and neglect the role of registration system in changing the unhealthy ecosystem of the market.

It is indeed a big problem in China's capital market that the application for IPO is fraudulent. However, the hope of containing the fraud in the auditing of the power department is wrong.

The reason is very simple. If the members of the issuance examination committee are too big, they can not be familiar with the situation of each application for IPO enterprises. They can only make formal audits according to the materials reported by enterprises.

The issuing Committee has indeed denied some applications for IPO, but most of these enterprises are only due to the fact that the declared materials are not standardized in form, and even the use of punctuation marks is not standardized. It is not because there is fraud in the declaration materials. Therefore, it is hard to say that there is no "wrong killing" in enterprises that fail to pass the examination.

It is also unrealistic to expect to rely on the audit system to block the money frenzy.

In fact, the reason why the current enterprises are keen to enter the IPO team is because they pay too much attention to the financing function of the stock market in the macro financial policy. The audit system is actually serving the needs of the policy, resulting in the market only seeing the benefits brought by the listing to the enterprises, while ignoring the mechanism of listing restrictions on enterprises and even the negative side. The companies that refuse to be listed as HUAWEI and Lao Gan Ma become heterogeneous.

Under the registration system, although the listing of enterprises is no longer necessary, the other side of the stock market will fully show that many enterprises will gradually withdraw from their difficulties, and the entire market is expected to achieve a relative balance between the one or two tier markets.

Although the A share market has been established for more than 20 years, it has been severely controlled by power in IPO. As the top management body in the A share market, the SFC has the important mission of supervising the market. However, because it must complete the policy demand of promoting market development and helping enterprise financing, this kind of "left handed and right-handed" pattern makes it difficult to supervise its regulation.

Many companies change their faces after going public.

This year, IPO has been accelerating. Every week, about 10 companies have been approved by the Commission.

However, a group of new shares and sub shares that have been listed since 2016, 30 companies reported losses in the first quarter of this year, which has been rare in recent years.

In March, the listed products of the Shang Dynasty were listed in the prospectus, which posted a profit of 3.15 yuan last year, and the issue price was as high as 54.35 yuan. However, the first quarter report released by the company showed a loss of 0 per share.

57 yuan.

What is worrying is that the similar situation is not the only one that still sells goods and houses.

Such a change in the face of the market can only show that the company's IPO declaration material has the possibility of counterfeiting or playing with some accounting means, but they have passed the audit easily.

Since the end of last year, the SFC has significantly increased its crackdown on various illegal and illegal phenomena in the market. However, because the policy is still supporting the financing of enterprises, the IPO audit is still open to the outside world. This also makes the Commission's advocacy of protecting the interests of small investors ridiculous.

In the process, the SFC's audit actually provides a power endorsement for these loss companies, and the reasons for unilaterally demanding investors' risk conceit are inadequate.

However, it is required that the issuing committee take charge of these loss companies on the basis of the general principles of "who audits and who is responsible", which is also unbearable for them. In fact, the companies that cheat in IPO are virtually no one responsible.

To change this situation, the most appropriate way is to discard the current IPO audit system. Through the implementation of registration system, let the market mechanism choose the IPO enterprises, and release the SFC from this audit, so that it can be more responsible and more comprehensive in exercising the duties of market supervision.

Another serious problem is that it has created and expanded the rent-seeking corruption in the capital market.

From the case of Wang Xiaoshi, the official of the trial Commission, who was first exposed in the initial stage of the audit system, to the recently released commission member Feng Xiaoshu's illegal stock speculation case, the fact that iron has proved that corruption has become a "malignant tumor" that is coexisting with the auditing system.

Although corruption can be punished by strong anti-corruption, as long as this can produce a hotbed of corruption, such corruption can hardly be eradicated, and the scourge caused by this corruption can only be borne by investors.

In the case of Feng Xiao Shu, although he himself has already been punished by the SFC, the companies that he did not approve of the listing conditions are still listed in the market and are hard to get out of the market. They have achieved the purpose of making money through counterfeiting and listing.

Therefore, in the revision of the securities law, relevant aspects should not avoid the IPO registration system reform.

Many problems existing in China's capital market are hard to come back. In many ways, the reasons can be found from the audit system. The audit system can not be abolished. It is also an objective reason that these problems have been difficult to solve for a long time.

We should actively explain to the market the positive role of registration system so that investors can understand the registration system and support it.

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As an important driving force for the implementation of the registration system reform, the revision of the securities law should face the registration system reform. If the target of reform is shelved, China's capital market can only spin around in the current circles, and it is hard to get a positive promotion.

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