Editorial Board, The Gem Is Moving Towards Registration System, Just In Time.

A few days ago, the thirteenth meeting of the Central Committee for deepening the reform and deliberation adopted the "implementation plan of the gem reform and the pilot registration system", which means that the pilot registration system reform of the gem started. Subsequently, the SFC and the Shenzhen Stock Exchange asked the market for the rules and regulations of the gem reform.

The scheme has drawn lessons from the core institutional arrangement of the Chuang Chuang plate registration system. In the past few months, the registration system has been running smoothly, providing experience and possibility for the registration system to be gradually introduced into the securities market.

Implementing the registration system for securities issuance is an important arrangement for deepening the reform of capital market, improving the basic system of capital market and improving the function of capital market. Since the establishment of China's securities market, it has been in the process of institutional improvement. During this period, there were some deficiencies in the construction of the rule of law in the market. There were also some problems such as fraud and speculation. The existence of these problems disrupted the economic order, affected the reform and the improvement of the securities market, and also affected the function of the securities market in serving the real economy, and failed to optimize the allocation of resources.

The essence of registration system is to govern the city according to law. The reform program has greatly increased the penalties for illegal activities such as fraud issuance, and provides investors' protection measures such as "ordering repo", "advance compensation", and "civil withdrawal system such as explicit withdrawal and implied participation", which provides a solid legal guarantee for deepening the registration system reform. Among them, the responsibility of compacting intermediaries, improving the cost of illegal and regulations, and increasing the accountability of sponsor institutions are all aspects of strengthening investor protection. We should implement the principle of governing the city according to law, take information disclosure as the core, streamline and optimize the issuing conditions, and increase the inclusiveness of the system so as to realize the effective landing of registration system.

Implementing the registration system of securities issuance helps to establish multi-level capital market, expand the scale of direct financing and guard against financial risks. With the continuous expansion of China's economy, the proportion of direct financing has not risen. Data show that at the end of 2018, the ratio of securities assets, including stocks and bonds, to GDP was 135.5%, down 31.4 percentage points from the end of 2007. At the end of 2018, the ratio of stock market to GDP was 44.6%, which was 75.5 percentage points lower than the end of 2007. The ratio of bonds to GDP was 90.9%, an increase of 44.1 percentage points from the end of 2007. It can be seen that the main reason for the decline of direct financing is the stock market.

Data show that between 2008 and 2018, the growth of corporate sector stock financing slowed down, and the stock market value fell by 28 percentage points at the end of 2007 compared with the end of 2007. The low scale of direct financing results in a faster rise in the macro leverage ratio. With the rapid growth of debt financing, slow growth of equity financing and the decline of share to GDP ratio, the debt level of the whole society has increased rapidly. The macro leverage ratio (/GDP) rose from 145.4% at the end of 2008 to 248.7% at the end of 2018, rising by more than 100 percentage points.

In order to stabilize the macro leverage ratio, prevent systemic financial risks and expand the scale of equity financing is an important way. In order to achieve this goal, we need to promote the registration system of securities issuance, instead of continuing the IPO queue.

Under the current circumstances, the implementation of registration system in the pilot scheme of gem is conducive to promoting the transformation of China's economic development mode, and providing financing services for more innovative enterprises to participate in the new round of industrial revolution and technological revolution competition. China's economy is in the process of industrial upgrading. The large-scale construction of new infrastructure will provide more possibilities for the application of digital economy, and a number of new industries and enterprises will emerge.

Traditionally, these innovative enterprises will have a large number of venture capital and industrial fund investment, but there is no way to withdraw funds, most of them choose to go to the US market. The landing of securities issuance registration system will greatly encourage social capital to invest in science and technology innovation enterprises, especially the gem reform and pilot registration system. In order to adapt to the new economic organization form, allow eligible special equity structure enterprises to appear on the gem, and solve the equity dilution that may be faced by the founders of the venture company or the important contribution personnel in the company's development process. And the decline of control power.

It should be said that, with the coming of a new round of technological innovation, China will promote the implementation of the registration system after the founding of the gem, which will contribute to the promotion of China's economic industrial upgrading and technological innovation, and form an industrial development model similar to the United States "Silicon Valley + NASDAQ".

? ? The registration system has assumed many strategic responsibilities, but to play its due value, we need to better implement it, adhere to the principle of rule of law and marketization, take information disclosure as the core, enhance transparency and authenticity, protect investors' rights and interests better, strictly govern the market according to law, really give the right of selection to the market, realize the intermediary function of optimizing the allocation of resources, and develop the Chinese economy with high quality. Provide motivation.

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