(Yicai) Oct. 20 -- China's securities watchdog has approved the registration of the first batch of 18 actively managed exchange-traded funds, bringing more incremental capital into the market.

The China Securities Regulatory Commission will continue to deepen capital market reform and further open up the market, Chairman Wu Qing said at the Financial Street Forum annual conference, which opened in Beijing yesterday. The country's economy remains underpinned by strong conditions and a positive long-term trend as it moves toward new and higher-quality growth, he added.

The underlying logic of how the capital market operates has quietly undergone profound change, making Chinese assets more attractive to allocate to, he pointed out.

Chinese listed companies posted net profits of CNY3.6 trillion (USD538 billion) and revenues of CNY37.7 trillion (USD5.63 trillion) in the first half of this year, Wu said, with the former rising almost 20 percent from a year earlier to reach the highest level in nearly three years. Dividends and share buybacks have totaled CNY2.1 trillion this year, equal to 2.7 times the amount raised through initial public offerings and follow-on offerings over the same period.

To keep the market stable, the CSRC will strengthen risk prevention for new types of business and remain highly vigilant against new risks such as overseas leveraged products linked to individual Chinese mainland shares, Wu said. The regulator will also improve long-cycle performance assessment mechanisms suited to long-term investment, broaden the sources, channels, and entry routes of long-term capital, deepen reform of publicly offered funds, and encourage eligible listed firms to step up share buybacks and increases in shareholdings, he added.

At the Lujiazui Forum in June, Wu announced that the CSRC would support the Shanghai and Shenzhen stock exchanges in launching actively managed ETFs, with the first batch of applications submitted in July.

The Shanghai Stock Exchange said its first batch of active ETFs received CSRC approval yesterday.

On reform, the CSRC will implement measures for the Star Market and ChiNext, adopt more inclusive and adaptable rules for listings, offerings and mergers and acquisitions, issue revised rules on the registration of securities offerings by listed companies at an appropriate time, and speed up the introduction of regulations on the oversight of listed firms.

To strengthen oversight, the CSRC will tighten penalties for shareholding reductions that violate regulations and clarify how it identifies such breaches. It will also issue guidelines on advance compensation in the securities market and set up a fund industry monitoring center.

On opening up, the watchdog will make it easier for qualified foreign institutional investors to invest and operate in China, support more foreign institutions in doing business in the country, and speed up the inclusion of Chinese yuan-denominated stock trading counters and real estate investment trusts in the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs.

Regarding the Beijing Stock Exchange, the number of listed companies and total market capitalization have each more than tripled since the bourse launched five years ago, while turnover has grown nearly tenfold, Wu pointed out. The CSRC will steadily launch ETFs tracking the BSE 50 Index, market-value-based allocation of new share offerings, and innovation evaluation criteria, and will also optimize the tiered management of the National Equities Exchange and Quotations system, also known as the New Third Board, he added.

Editor: Martin Kadiev