In recent years, the regional equity market in our country has become the most dynamic part of the multi-level capital market construction. Not only the number of regional equity markets and the number of listed non-listed companies have risen sharply, but remarkable progress has also been made in the areas of service enterprise financing product innovation and enterprise standardization development. Regional equity markets are gradually building a solid base in a multi-level capital market. Experts believe that with the gradual normative development of the regional equity market and the deepening of reforms in the relevant market system, more and more high-quality listed companies will be listed, and the stock exchange and mergers and acquisitions will be active. At the same time, regulating the regional equity market can provide an important channel for SME financing and truly become a necessary and important part of China's multi-level capital market.
Tian Lihui, head of Nankai University's Institute of Financial Development, said that the regional equity exchange market is an important part of China's construction of a multi-level capital market system. It provides financing, bond transfer and share transfer services to SMEs in the region, and it has played an active role in promoting small and medium-sized enterprise equity trading and financing and encouraging scientific and technological innovation.
Dong Doxin, director of the Institute of Financial Securities at Wuhan University of Science and Technology, said that the “four boards” focused on serving local enterprises. As the local local enterprises within the jurisdiction of the local government can be controlled at risk, the local government knows the bottom line for listed companies, the major difference between the regional “four boards” and the national new three boards lies in emphasizing the service of local economy and the control of risk prevention and control.
In January 2017, the General Office of the State Council released the Circular on Regulating the Development of a Regional Equity Market and officially started the rectification of the regional equity market. This Circular and the Trial Measures for the Supervision and Administration of Regional Stock Market bring a lot of changes. Tian Lihui said that these specific measures standardized the development of the “Four Boards” market, clarified qualified investors, protected public investors, lowered the leverage of related enterprises, promoted the innovation of public entrepreneurship, boosted the market to serve regional economy, driven service Innovation development strategy, and reshaped the microeconomic foundation.
Gao Pengfei, chief researcher at Qi Lu Equity Exchange Center, said that the “Second Review Draft” of the securities law clearly divided securities trading establishments into the three levels, that is, Stock Exchanges, other national securities exchange places (the new third board) approved by the State Council and the regional equity markets established in accordance with the State Council. The new Third Board and the regional equity market are also included in the securities law, thus from the legal level to the implementation level, the regional market will play a better foundation role in the multi-level capital market system.
“In the short run, some regional equity markets need to be integrated, and listed companies in different places need to be cleaned up. In the long run, not a rule is not a radius, if the rules and regulations can be achieved, the normative regional equity market will have a bright future.” Tian Lihui said that with the market more standardizing, participating high-quality companies will gradually increase, and securities trading and mergers and acquisitions will be active. The standardized regional equity market can provide an important channel for SME financing and truly become a necessary and important part of China's multi-level capital market.
For the future construction of regional equity market system, Tian Lihui suggested, first of all, we need to clear the position of the regional equity market. Regional equity market should be located in the capital market of our country's basic market, regional market, and the lower one level of the market compared to the transfer market for SMEs, under the supervision of local characteristics by the local regulatory authorities. Second, we should establish transfer board system. Companies that perform well in regional equity markets can turn into the national transfer market for SMEs and even listed companies in Shanghai and Shenzhen public stock exchanges. Third, we must unify the basic standards. Although the regional equity market should have local characteristics, the state financial regulatory agencies must make mandatory requirements on the infrastructure and rules in the regional market so that the situation across the country can be unified for data comparisons. We need set up a platform for a national risk list, and do a good credit rating Integrated management and daily fund monitoring to prevent the transmission of risk events. This is a necessary task for improving the basic engineering of a multi-level capital market.
