(Yicai Global) June 18 -- China’s securities regulator will further develop cross-boundary investment channels, promote global policy synergy to overcome the Covid-19 crisis and build an international law enforcement alliance to prevent fraud, its chairman said today.

The China Securities Regulatory Commission will accelerate the inclusion of firms listed on the Shanghai’s Nasdaq-style Star Market in the Shanghai-Hong Kong Stock Connect mechanism, which allows foreigners to trade in mainland stocks and vice versa, Yi Huiman said at the 12th Lujiazui Forum, a key financial summit.

The regulator will also introduce the market maker system, a refinancing management method and a fast small-sum financing system at the Star Market to enable more tech firms to leverage the market to grow and develop. A Star Market index and related products and tools will also be developed and released.

It will expand the investment scope and targets of the Shanghai-Hong Kong, Shenzhen-Hong Kong and Shanghai-London Stocks Connects so as to build Shanghai into a financial hub and support the consolidation of Hong Kong's status as an international financial center.

Policy Synergy Is Key

The world’s major markets have fluctuated greatly since the Chinese Lunar New Year in January. Such fluctuations are likely to happen again before the Covid-19 crisis is resolved, Yi said.

The pandemic is still raging, so policy synergy is key to preventing the economy from falling into a vicious circle, Yi said, adding that strengthening cooperation is the only way to tackle crisis and risk challenges.

The financial sector must take the initiative to better promote the global allocation of resources when facing difficulties, Yi said.

Deepening international cooperation is a necessary to effectively deal with the global economic and financial crisis. Major economies have set up a Financial Stability Board to enhance macro-prudential supervision and promote the resolution of the crisis and the recovery of the world economy based on the G20’s multilateral cooperation after the 2008 international financial crisis, Yi said.

Global Law Enforcement

The CSRC will continue to enhance ties with overseas financial watchdogs and organizations and play an active role in global financial governance to jointly form a law enforcement alliance to crack down on securities delinquencies, work out approaches to strengthen cooperation on audit supervision over listed firms worldwide and protect the rights and interests of investors around the globe, he said.

Major economies have released unprecedented stimulus policies to help speed up economic recovery, Yi said. It is highly probable that there will be enough global liquidity in the post-epidemic period.

The regulator will support Shanghai in introducing pilot measures to test major reforms and innovations in the capital markets, Yi said. It will continue to promote the open development of Shanghai’s stock market, bond market, futures and financial derivatives markets to help build the city into an international financial center. It will also strengthen the international pricing influence of commodities such as crude oil.

The CSRC will continue to encourage and support foreign-funded financial institutions to establish or control securities, funds and futures institutions in China, Yi said.

Editor: Kim Taylor