Third, The Third Half Of The Shenzhen Stock Market Reform, Looking For Breakthrough In The Second Half Of The Year

Twenty-first Century researcher Livy, Capital Research Institute

Under the impact of the new outbreak of coronavirus pneumonia, many businesses related to the capital market are being disturbed to a certain extent.

On the one hand, the delayed extension of some large and medium cities may lead to some degree of impact on the preparatory work of part of the registration reform project. On the other hand, the quarantine requirements caused by the epidemic will also bring personnel to some of the governing units, trading places and investment banking institutions after reopening work.

However, in twenty-first Century, the Capital Research Institute held that in the country's positive response to and control over the epidemic situation, the pace of the reform of the A share market registration system will not be disturbed.

We believe that the occurrence of the epidemic does not exclude the registration system reform node from being delayed for a certain period of time. It is estimated that the relevant reform will be delayed for about 1 weeks to 2 weeks. However, with the gradual control of the epidemic situation, the related reform measures will also be implemented one after another.

Registration system unchanged

The epidemic is likely to cause some disturbance to the rhythm of registration system, but it will not affect the direction of great reform.

This point has been clearly pointed out in the position of the previous regulatory authorities. The head of the relevant departments of the SFC stressed on the eve of the opening of February 3rd that the impact of the epidemic on the market is short term and will not change the medium and long term trend.

"We launched the" deep reform 12 "is considered from the long-term development of the capital market, involving in-depth institutional reform, aimed at improving the basic system of capital market, improving market function, improving market efficiency and enhancing internal stability. The above leaders said, "these reforms are fundamental and systematic reforms. They are marketization and rule of law reform. They will benefit the whole capital market and bring more opportunities to market participants. Therefore, the direction and determination to push forward the reform will not be changed because of the temporary difficulties brought by the epidemic.

In twenty-first Century, the Capital Research Institute held that, as registered production was the core task of deepening the reform of the capital market, the SFC working conference held in 2020 that we should steadily launch the reform of the gem and make a pilot registration system. The SFC's tone setting means that the direction of capital market reform, such as the registration system, will not be affected by the outbreak.

And from many details, the anticipation of the continuous reform of registration system is also being strengthened.

On the one hand, the new securities law will be implemented in March 1st this year, which undoubtedly laid the legal foundation for registration. On the other hand, according to the twenty-first Century Capital Research Institute, from a number of investment bankers, some staff members have received telephone notices from the regulatory authorities, and the direction of the registration system reform will not be affected.

Take the new three board reform as an example, although the current small IPO project of the selected layer is clearly defined as the dual way of "stock transfer audit + the approval of the securities and Futures Commission", the audit right transfer to the stock transfer system has marked the formation of a "quasi registration system" audit mode similar to that of the science and innovation board, which is also an important part of the tide of registration reform.

Although the impact of the epidemic has not yet subsided, the selection of new three boards is still steadily advancing.

For example, in February 10th, the Beijing Securities Regulatory Commission (CSRC) has launched the filing of the listed company's filing guidance materials in the area. Taking into account the impact of the epidemic, the relevant reporting forms have been changed to electronic declarations. The sponsor only needs to send the scanned version of the declaration documents to the designated mailboxes and confirm by electricity.

At the same time, regulators have also paid attention to the synchronization of epidemic prevention in the process of promoting reform. For example, in February 3rd, the stock transfer system sent notice to a number of securities dealers, asking them and the times to sort out the current epidemic response measures and the regulatory support matters for the new three board reform and business development.

We believe that although the epidemic may bring some delay to the reform process of registration system, the "hard environment" of registration system reform will also be more sufficient under the support of electronic audit and off-site office technology.

Looking forward to breakthrough in the second half of the year

Although the epidemic will not change the direction of registration system, it may still bring a certain degree of delay to the original reform progress.

We believe that there are three factors that may lead to a certain degree of delay in the reform process than the plan. First, the workload required by the deployment of relevant epidemic prevention work to the management system and the securities business organizations. Two, most major areas will be postponed until February 10th, so the preparatory arrangements for potential projects related to the registration system reform may also be affected. Three, the quarantine requirements caused by the epidemic will lead to some regulatory and institutional staff still unable to arrive on duty in time after the resumption of work, which will bring a slight delay to the progress of the reform.

However, we believe that the above factors will not affect the registration system reform for a long time. Considering that A shares have been opened for more than a week, most of the relevant positions in the capital market have come into operation. It is considered that the delayed effect of the epidemic on registration reform will be controlled in one week to two weeks.

At the same time, the focus of registration reform will mainly be reflected in the new three board market and the growth enterprise market, and the two markets will also have enough motivation to strive for excellent companies to carry out IPO.

In the new three board market, many new three Board companies have announced that they will apply for landing on the selected layer and carry out small IPO, and many securities regulatory bureaus have also started the small IPO's guidance and acceptance. We expect that from February 10th week, the potential new third board selection applicants will start the corresponding guidance, and in March, the application of the relevant company's entry level and small IPO is expected to get the acceptance of the stock transfer system.

According to the first batch of enterprises accepted by the science and technology board in March of 2019, the time analogies were launched in June that year. In June, the approximate rate became the first time window of the selected companies.

By contrast, the reform of the growth enterprise market may be even later.

In May 2019, we predicted that the gem reform of the stock market: the gem is expected to welcome the registration system reform window next year. It is predicted that the gem reform will first fall in 2020 after the creation of the board, which is consistent with the signal released by the regulatory authorities. Huang Lina, director of the Shanghai regional center of Shenzhen Stock Exchange, later said that the gem reform would be a result after six months to a year.

However, there has not yet been a formal reform document for gem, which is expected to usher in 2-3 months in 2020.

If we calculate the corresponding reform proposals in March, we believe that the Shenzhen stock exchange is expected to usher in the preparation of the registration system in May. In July, it can enter the stage of declaration and acceptance. Therefore, the first batch of gem registration projects are expected to be listed in the fourth quarter of October -11.

In conclusion, we believe that if the direction of capital market reform at the institutional level will not be greatly adjusted, the new three board and gem reform are expected to usher in a breakthrough in practice in the second half of this year.