What’s new: China’s securities regulator vowed to spare no effort to maintain the stable operation of the capital market and keep overseas listing channels open.
The China Securities Regulatory Commission (CSRC) made the pledge Wednesday after a meeting of China’s top financial policy committee, sending a strong signal that Beijing intends to stabilize financial markets and bolster investor confidence in response to recent market sell-offs.
The CSRC vowed to implement the central economic work conference’s commitment to maintain consistent policy expectations and help stabilize the macroeconomic market and financial operations.
Specifically, the regulator said it will encourage publicly traded companies to buy back shares and guide fund companies to purchase shares to prop up prices. It will also push ahead with the registration-based stock listing system and improve the support mechanism for private companies’ bond financing.
The CSRC said it will continue to enhance communications with U.S. regulators and try to reach an agreement on U.S.-China audit cooperation as soon as possible. It will also strengthen cooperation between the mainland and Hong Kong capital markets.
The Financial Stability and Development Committee meeting’s call was echoed by China’s central bank, banking and insurance regulator, and Finance Ministry. The central bank promised to prevent property market risks. The China Banking and Insurance Regulatory Commission encouraged bank subsidiaries, trust firms and insurance companies to help stabilize the capital market by increasing stock investment.
The background: U.S.-traded shares of Chinese companies have been crashing for three trading days after U.S. regulators named five Chinese companies that could be kicked off American stock markets for failing to meet audit requirements. Chinese stocks traded on the mainland and in Hong Kong continued to get hammered in a market panic earlier this week.
The Securities and Exchange Commission said the five companies failed to adhere to the Holding Foreign Companies Accountable Act, which would ban American trading of stocks of companies if their audit papers can’t be checked by the U.S. Public Company Accounting Oversight Board (PCAOB), the federal audit watchdog overseen by the SEC, for three straight years.
The PCAOB told Caixin Tuesday that it’s in talks with Chinese authorities on enabling access to inspections of U.S.-traded Chinese enterprises.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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