Across The Border | What to expect from China’s new chief securities regulator?
China Securities Regulatory Commission chairman Liu Shiyu likely to set aside IPO reform and stock connect expansion due to focus on stability
Those looking forward to a new broom sweeping clean will have to wait, as the priority for China’s new chief securities regulator will be stability rather than reform, industry insiders say.
Schemes in the reform pipeline, including reform of the initial public offering process and plans for a Shenzhen–Hong Kong stock connect scheme, to complement the existing Shanghai–Hong Kong stock connect that would enable global investors to trade more mainland shares, were likely to be shelved in the next few months, they said.
The mainland’s benchmark Shanghai Composite Index plunged 6.41 per cent on Thursday to close at 2,741.25, it’s lowest level since February 3, just days after the appointment of Liu Shiyu as the new chairman of the China Securities Regulatory Commission.
The big drop would have reminded him just how volatile markets dominated by retail investors can be, and how hard it could be to stabilise casino-style markets crammed with speculators and vested interests.
“It is always challenging to find out the best supervisory path in China, as the market is torn by the struggle between small retail investors and big ones,” a CSRC official told the South China Morning Post. “We can never copy what is done in the US because our market participants are of different nature.”
The pressure will be bigger for Liu if he wants to push forward with more reform
The official said Liu was “doing research”.