Comment: Speeding Up The Reform Of Registration System With Improving The Quality Of Listed Companies

Pang Ming (Doctor of economics, chief economist and chief strategic analyst of Huaxing securities)

? ? ? Recently, the State Council in the "opinions on further improving the quality of listed companies" stressed: we should comprehensively implement and step by step the securities issuance registration system to support the listing of high-quality enterprises; we should improve the channels and methods for institutional investors to participate in corporate governance and improve the governance level of listed companies; we should explore the establishment of a long-term assessment mechanism for institutional investors to attract more medium and long-term capital We should allow more qualified foreign investors to make strategic investment in domestic listed companies, so as to promote the listed companies to become better and stronger.

Further deepen the reform of the basic system and implement the registration system step by step

The chairman of the SFC said on October 16 that it would be an appropriate time for the SFC to comprehensively promote the registration system.

On October 27, there was a media report that the regulatory authorities planned to merge the main board and the small and medium-sized board of the Shenzhen Stock Exchange, and no longer distinguish them according to the size of the enterprises. As long as they meet the listing standards, they will be listed on the main board. In the future, the overall layout of the exchange is expected to form a coordinated development framework in which Shanghai Stock Exchange is "main board + science and Technology Innovation Board" and Shenzhen stock exchange is "main board + growth enterprise board". This can be regarded as the starting point of a new round of in-depth reform of the securities market, which aims at improving the quality of listed companies and speeding up the reform of registration system.

The author believes that under the background of the deepening and continuous promotion of capital market reform, the merger of the main board of Shenzhen Stock Exchange and the small and medium-sized board is conducive to consolidating the differentiated positioning of the two boards, strengthening the function of issuing and financing, improving the efficiency of direct financing, unifying the regulatory standards, avoiding regulatory arbitrage and improving the quality of listed companies. It is expected to pave the way for the comprehensive implementation and step-by-step implementation of the registration system reform Road.

On March 1, 2020, the revised "guidelines for the standardized operation of listed companies" issued by the Shenzhen stock exchange is intended to fully implement the system convergence and regulatory adaptation of the implementation of the new securities law, and further optimize and improve the regulatory system of listed companies. It is worth noting that the revised "guidelines for the standardized operation of listed companies" is applicable to both the main board and the small and medium-sized board listed companies, while the revised guidelines for the standardized operation of gem maintain certain differences.

At present, small and medium-sized board listed companies are mainly small and medium-sized enterprises with stable development in traditional industries. The industry structure, scale and development stage are similar to those listed on the main board. Correspondingly, the gem after reform mainly serves the growth oriented innovative and entrepreneurial enterprises, and supports the deep integration of traditional industries with new technologies, new industries, new formats and new models. The author expects that the differentiated positioning and development will be clear between the two boards and the gem, and between the gem and the sci tech innovation board, so as to promote the formation of a moderate competition pattern with different emphasis and mutual supplement between Shenzhen Stock Exchange and Shanghai Stock Exchange.

On the basis of learning from the excellent incremental reform experience of the science and technology innovation board, as the pioneer of the stock market registration system reform, gem has carried out all-round reform on the basic systems of issuance and underwriting, valuation and pricing, information disclosure, registration supervision, refinancing, merger and reorganization, delisting mechanism and main responsibility issuance. The author believes that the gem reform in setting the listing conditions of diversified and inclusive registration system, raising the threshold of investors, relaxing the price limit, improving the efficiency of securities lending, optimizing the refinancing and merger and reorganization mechanism, improving the delisting system, and clarifying the transition period, etc., are expected to accumulate and provide valuable experience for the implementation of registration system in the main board and small and medium-sized board of Shenzhen Stock Exchange, and further promote the development of Shenzhen Stock Exchange Overall development of the exchange.

It can be said that the transformation from the approval system to the registration system is a big test on listed companies, enterprises to be listed, intermediary institutions and even regulatory agencies and exchanges, with the improvement of the quality and transparency of information disclosure as the test syllabus, the improvement of the quality of listed companies and the efficiency of direct financing, and the whole society and the whole market as examiners. From market access to listing pricing, from continuous supervision to refinancing and M & A, and from exit mechanism to subject responsibility issuance, each link of registration system reform helps to give full play to the decisive role of the market in the allocation of resources, to urge each participant to revere and respect the market, and to deal with the relationship between the market subjects with the principles of marketization and legalization.

On the basis of the capital market reform, it will be the key to deepen the reform of capital issuance system step by step It will greatly improve the efficiency of resource allocation in the capital market and the support of the direct financing system to emerging industries and the real economy, promote the release of the vitality and power of the capital market at a deeper level, further promote the comprehensive and in-depth development of the capital market, and successfully create a standardized, transparent, open, dynamic and resilient capital market.

Improve the channels and ways of institutional investors to participate in corporate governance

The channels and ways for institutional investors such as social security fund, enterprise annuity, insurance fund and public fund management institutions to participate in corporate governance are mainly reflected in the following aspects: exercising shareholders' rights, actively participating in decision-making of major issues, publicizing the principles and practices of their participation in the governance of listed companies to the whole society in accordance with laws and regulations and the articles of association, so as to promote the governance level of listed companies

The first is to reasonably participate in corporate governance by exercising the rights of voting, inquiry and suggestion according to law;

Second, actively adopt and guide the governance of listed companies by participating in the decision-making of major issues, recommending the candidates of directors and supervisors, and supervising the performance of directors and supervisors;

Thirdly, the whole society and stakeholders should pay more attention to corporate governance by publicizing the objectives and principles of their participation in the governance of listed companies, the strategy of exercising voting rights, and the situation and effect of shareholders' rights exercise;

Fourth, small and medium-sized investor protection institutions should play an active role in the governance of listed companies through various channels such as holding shares and exercising rights to protect the legitimate rights and interests of small and medium-sized investors.

In addition, efforts should be made to cultivate all kinds of standardized market intermediary institutions, provide detailed information basis and reliable professional service support, so as to facilitate institutional investors to actively pay attention to the governance status of listed companies, promote the formation of good corporate governance practices, and make timely and correct bid value judgments and investment decisions.

With the reform and development of China's capital market in recent years, the level and influence of institutional investors in the capital market have been significantly improved. More and more institutional investors, motivated by the enthusiasm of trust responsibility, are more capable and motivated to participate in corporate governance and supervise the management. They have an impact on corporate governance and business decision-making through "voting by hand" or "voting by foot", It is mainly reflected in the supervision of the occupation of related transaction funds, the supervision of management compensation scheme, the impact on accounting earnings information of listed companies, the impact on the governance efficiency of independent directors, and the impact on the transfer of control rights. These efforts, which focus on the governance of listed companies and influence corporate governance decisions, partially correct the wrong decision-making and short-sighted behavior of managers, increase the transparency of corporate information, and enhance the value of the company, so as to maximize the return on investment.

The empirical research in both academic and industry shows that, on the one hand, institutional investors have more ability and motivation to distinguish the good and bad of listed companies, and confirm the stock price according to the real value of the company, so as to effectively allocate resources and increase market stability; on the other hand, institutional investors can take advantage of their professional advantages To supervise the operation and operation of the major shareholders and management of listed companies, urge the major shareholders and management to take the real performance of the company as the goal, and reduce short-term speculation, behavior detrimental to the interests of shareholders and even violations of laws and regulations.

However, there may be some problems in corporate governance, such as the difference between the free rider and the corporate governance, and the investors' ability to participate in the corporate governance. The more practical method should be to establish and improve a good communication mechanism between the board of directors and investors, balance the interests of institutional investors, the company's management and major shareholders, so as to promote all parties to grow together with the enterprise and share the development achievements of the enterprise. In addition, the ability of institutional investors to supervise and participate in corporate governance is restricted by specific legal and institutional environment. These can be the next step for regulators.

On the other hand, more qualified foreign investors should be allowed to make strategic investment in domestic listed companies. Foreign investors' strategic investment in domestic listed companies is conducive to the development and expansion of China's institutional investors, the improvement of the quality and intelligence level of listed companies, the promotion of the reform and opening up and the long-term, stable and healthy development of China's capital market, as well as the enhancement of the financing function, resource allocation ability, comparative advantage and attractiveness of China's capital market In order to enhance the international openness of China's financial market and promote the internationalization process of China's financial system, it is conducive to promoting the proportion of foreign investors and institutional investors in the A-share market to continue to rise, and to promote the value discovery strategy and value investment concept to become the consensus and normal of the market. For enterprises that accept strategic investment, in addition to financial resources and capital investment that focus on long-term benefits, social responsibility and values, they can also obtain the resources and experience shared by strategic investors in industry, technology, management, social capital, etc.

Explore the establishment of long-term assessment mechanism to make institutional investors take further responsibility

Institutional investors should give full play to the professional value, make medium and long-term investment and value investment become the mainstream of mainstream investment philosophy and investment system, build and improve the framework, system and logic of fundamental research and in-depth research, on this basis, drive investment, dare to set up medium and long-term holdings of high-quality targets, so as to better generate excess returns under active management and long-term and stable investment Return on capital. At the same time, it is necessary to build and strengthen the long-term incentive and restraint mechanism to further develop the concept of professional investment and institutions to establish long-term investment; the internal platform of professional institutions should better identify, attach importance to, empower and reward professionals who can create sustainable outstanding performance. For example, the long-term dimension should be introduced into the assessment requirements for the management of investment institutions, and the long-term performance of investment should be taken as the core assessment index; the assessment of personnel in key positions should take the long-term performance and compliance risk control as an important basis, and make appropriate salary arrangement.

For regulators, it is suggested to start from the following aspects:

First, attract more medium and long-term funds into the market, continue to vigorously develop the team of institutional investors, encourage important long-term professional investors to conduct professional centralized operation, and give full play to the role of professional investors in effective market pricing and resource allocation.

The second is to strengthen the coordination and balance between the financing side and the investment side of the capital market, facilitate listed companies to take into account the needs of high-quality development and market conditions, optimize financing arrangements, obtain more convenient direct financing channels and long-term, stable and risk matching funds, and more timely, accurate and effective pricing and resource allocation of listed companies.

Third, encourage institutional investors to actively and effectively participate in the governance of listed companies, improve the overall quality of listed companies, and promote institutional investors to help high-quality companies become bigger and stronger and share high-quality development. Form a positive cycle of investment performance and the development of listed companies.

Fourth, we should further deepen the reform and construction of the capital market, continuously improve the quality of listed companies, increase the cost of violating laws and regulations, improve the exit mechanism, promote the survival of the fittest of listed companies, form a good investment ecology, and form long-term stable investment expectations.

Fifthly, through the formulation and improvement of relevant laws and regulations, to provide institutional protection for the interests of investors, improve the double principal-agent mechanism between institutional investors and enterprises, and reduce the loss of "moral hazard".

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