On April 12, 2024, the State Council issued the "Several Opinions on Strengthening Supervision, Preventing Risks, and Promoting High Quality Development of the Capital Market" (hereinafter referred to as the "Opinions"). The "Opinions" issued this time consist of 9 parts, which is a guiding document for the capital market issued by the State Council after 10 years since the two "National Nine Articles" in 2004 and 2014. It fully reflects the high attention and earnest expectations of the Party Central Committee and the State Council for the capital market.

1. Overall Requirements - Development Goals

In the next five years, a general framework for high-quality development of the capital market will be basically formed.

By 2035, a highly adaptable, competitive, and inclusive capital market will be basically established, and the legitimate rights and interests of investors will be more effectively protected.

By the middle of this century, the modernization level of the capital market governance system and governance capacity will be further improved, and a high-quality capital market that matches the financial power will be built.

2. Strictly control the access to issuance and listing

Further improve the issuance and listing system. Improve the listing standards for the main board and the ChiNext board, and refine the evaluation criteria for the innovation attributes of the Science and Technology Innovation Board. Strictly supervise the spin off listing. Strictly review and control the refinancing process.

Strengthen the full chain responsibility of issuance and listing. Further strengthen the responsibilities of the exchange's audit subject, the issuer's primary responsibility, and the intermediary agency's "gatekeeper" responsibility.

Strengthen the supervision of issuance and underwriting. Rectify market chaos such as high price over fundraising and group bargaining.

3. Strict continuous supervision of listed companies

Strengthen information disclosure and corporate governance supervision.

Comprehensively improve the system of rules for reducing holdings. Introduce management measures for reducing holdings of listed companies and implement classified policies for different types of shareholders.

Strengthen the supervision of cash dividends for listed companies. For companies that have not received dividends for many years or have a low dividend ratio, restrictions will be imposed on major shareholders to reduce their holdings and risk warnings will be implemented. Intensify incentives for high-quality dividend companies and take multiple measures to promote the increase of dividend yields.

Promote listed companies to enhance their investment value.

4. Strengthen delisting supervision

Deepen the reform of the delisting system and accelerate the formation of a normalized delisting pattern that should be fully withdrawn and cleared in a timely manner.

Further strictly enforce delisting standards and establish and improve a differentiated delisting standard system for different sectors.

Further facilitate diversified delisting channels, improve policies and regulations on absorption and merger, and encourage and guide leading companies to focus on their main businesses and increase their integration efforts with listed companies in the industrial chain.

Further reduce the value of "shell" resources and accurately crack down on various illegal "shell preservation" behaviors.

Further strengthen delisting supervision, and controlling shareholders, actual controllers, directors, executives, and others responsible for major illegal delisting must compensate investors for losses in accordance with the law.

5. Strengthen the supervision of securities and fund institutions, promote the industry to return to its roots, and strive for excellence and strength

Promote the high-quality development of securities and fund institutions. Guide industry institutions to establish correct business concepts, strengthen shareholder and business access management of industry institutions, and improve the qualifications and filing management system for senior executives.

Actively cultivate a good industry culture and investment culture. Resolutely rectify unhealthy practices such as materialism, extravagance, quick success, and flaunting wealth.

6. Strengthen transaction supervision and enhance the inherent stability of the capital market

Promote the smooth operation of the market. Strengthen the comprehensive analysis of stock market risks, enhance strategic strength reserves and stability mechanism construction. Concentrate on rectifying prominent risks and hidden dangers in the field of private equity funds. Carry out cross market, cross industry, and cross-border risk monitoring and response.

Strengthen transaction supervision. Strictly investigate and punish illegal and irregular behaviors such as market manipulation and malicious short selling, and strengthen deterrence and warning.

Establish a sound expectation management mechanism.

7. Vigorously promote the entry of medium and long-term funds into the market, and continuously strengthen the long-term investment force

Establish a market ecology that cultivates long-term investment, improve the basic system that adapts to long-term investment, and build a policy system that supports "long-term money and long-term investment".

Steadily reduce the comprehensive fee rate of the public fund industry and study and standardize the salary system for fund managers. Revise the classification evaluation system for fund managers, and urge the establishment of rational investment, value investment, and long-term investment concepts.

Support the steady development of private equity securities investment funds and private equity asset management businesses, and enhance the stability of investment behavior.

8. Further deepen reform and opening up comprehensively, better serve high-quality development

We will focus on doing a good job in five major areas: technology finance, green finance, inclusive finance, pension finance, and digital finance, and increase support for stock and bond financing for enterprises that comply with national industrial policies and break through key core technologies.

Improve the multi-level capital market system. Adhere to the differentiated development of the main board, science and technology innovation board, growth enterprise board, and Beijing Stock Exchange, deepen the reform of the New Third Board, and promote the standardized development of regional equity markets.

Persist in coordinating high-level institutional opening and security of the capital market. Expand the financing channels for overseas listing of enterprises and improve the quality and efficiency of overseas listing filing management.

9. Promote the formation of a joint force to promote high-quality development of the capital market

Promote the strengthening of the rule of law in the capital market and significantly increase the cost of illegal activities.

Intensify the joint crackdown on illegal activities related to securities and futures. Deepen the coordination and linkage between the central, local, and inter ministerial levels.

Build a strong regulatory iron army with solid political, capability, and work style. Strictly improve the management of departing personnel from regulatory agencies, rectify issues such as "shadow shareholders", improper shareholding, political and business "revolving doors", and "runaway resignations".