The China Securities Regulatory Commission intends to introduce a market maker mechanism on the Science and Technology Innovation Board to clarify access conditions

　　China Singapore Finance and Economics reported on January 7th that the China Securities Regulatory Commission publicly solicited opinions on the Pilot Regulations on the Market-Making and Trading Business of Securities Companies' Sci-tech Innovation Board Stocks (Draft for Solicitation of Comments) on the evening of the 7th.

　　The drafting note stated that the "Implementation Opinions on the Establishment of the Sci-tech Innovation Board and the Pilot Registration System on the Shanghai Stock Exchange" stated that the Sci-tech Innovation Board will introduce a market maker mechanism on the basis of bidding transactions when conditions are ripe.

Screenshot of the SFC website

　　The China Securities Regulatory Commission stated that since the establishment of the Science and Technology Innovation Board, the market has been operating smoothly and various reform measures have achieved remarkable results.

In order to implement the "Implementation Opinions" and further promote the establishment of the Sci-tech Innovation Board and the pilot registration system reform, the China Securities Regulatory Commission drafted the "Regulations on the Pilot Business of Securities Companies' Sci-tech Innovation Board Stock Market-Making Trading Business (Draft for Solicitation of Comments)". The market business mechanism is now soliciting opinions from the public.

　　The drafting notes pointed out that there are 17 articles in the "Market-Making Regulations", which mainly include six aspects of market maker access conditions, access procedures, market-making bond source arrangements, internal control, risk monitoring and control, and supervision and law enforcement.

　　The entry requirements are based on the principle of “stable start and controllable risks”. In the initial stage, securities companies participating in the pilot program must not only have complete business plans, professionals, and technical systems, but also meet capital strength and compliance risk control capabilities. There

are two conditions: the

.

In addition, specific requirements such as the business experience and practice experience of relevant executives and professionals are to be clarified by the Shanghai Stock Exchange in the supporting business rules.

　　Eligible securities companies may submit relevant application materials for market-making transactions to the China Securities Regulatory Commission.

In view of the strong professionalism of the market-making transaction business and high requirements on the securities company's business, systems, personnel, and risk control, the "Market-Making Regulations" require an assessment of whether a company has market-making business capabilities.

Those who have passed the Shanghai Stock Exchange’s assessment and test shall apply to the China Securities Regulatory Commission, and the China Securities Regulatory Commission shall approve the business qualifications.

　　In order to enrich the source of market-making securities, the "Market-Making Regulations" clarified that self-owned stocks, stocks borrowed from China Securities Finance Co., Ltd., or other stocks that have the right to be disposed of can be used.

The details will be stipulated by the Shanghai Stock Exchange after the China Securities Depository and Clearing Co., Ltd. and China Securities Finance Corporation Limited.

　　At the same time, the "Market Making Regulations" put forward strict requirements on pilot securities companies.

The first is to improve the business isolation system to prevent the improper flow of sensitive information and strictly prevent conflicts of interest; the second is to establish and improve the internal control, decision-making process, and balance mechanism of market-making transactions to ensure the orderly development of the business; the third is to strengthen the management of market-making transactions. We will improve the requirements for the prevention and control of the integrity of the business and the anti-money laundering, and prevent the transfer of benefits, insider trading, market manipulation and other illegal activities.

　　The "Market-Making Regulations" also imposed strict requirements on pilot securities companies: First, incorporate market-making transactions into the comprehensive risk management system, improve risk monitoring indicators, and prevent and control business risks; second, establish a sound abnormal transaction monitoring mechanism and report A dedicated account and full monitoring by the Shanghai Stock Exchange to prevent any impact on market stability; the third is to calculate and report risk control indicators based on the self-owned stock standards. In

. The Shanghai Stock Exchange has specified specific business rules; the fourth is to handle emergencies and fulfill the obligation of information submission.

　　The "Market Making Regulations" clarified that if securities companies violate relevant laws and regulations and the provisions of the China Securities Regulatory Commission in market making transactions, the China Securities Regulatory Commission and its dispatched offices may take regulatory measures and administrative penalties in accordance with the law, and authorize the Shanghai Stock Exchange to formulate business rules , Implement self-discipline management of the securities market-making transaction business in accordance with the law.

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