China securities regulator says it will deepen reform to improve listed company quality

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SHANGHAI (Reuters) – China’s securities regulator said on Wednesday it will unveil fresh measures to deepen reform of Shanghai’s tech-focused STAR market, as part of efforts to improve listed company quality and attract long-term capital.

Wu Qing, chairman of the China Securities Regulatory Commission (CSRC), also told a conference in Shanghai that the watchdog will crack down hard on market misbehaviours and strengthen regulation of high-frequency trading and over-the-counter derivatives.

“We will go all out to promote high-quality development of China’s capital market,” Wu said in a speech at the annual Lujiazui Forum.

“We will grow ‘patient capital’, and attract more long-term money into the market.”

China’s stock market has bounced off five-year lows hit in February after Wu became CSRC chairman and announced a slew of market-boosting measures, but the rebound has been loosing steam in recent weeks amid concerns over China’s economic health.

Under Wu, the CSRC has raised the bar for company listings, tightened oversight of computer-driven quant funds, and deepened reform of China’s fund and brokerage industry.

Wu said on Wednesday that regulators will publish eight new measures to deepen STAR market reform, with a focus on promoting hard-core technologies. But he didn’t give details.

The CSRC will also support listed companies to enhance technology competitiveness through merges and acquisitions, as well as other capital market tools, he said.

Wu, who earned the nickname “brokerage butcher” during a previous regulatory stint, vowed to deal harsh blows to illegal activities to maintain market fairness.

The CSRC said last month that it had fined China Evergrande’s onshore flagship unit 4.18 billion yuan ($577 million) for fraudulent bond issuance and illegal information disclosure, and barred Evergrande founder Hui Ka Yan from the securities market for life.