(Yicai Global) June 19 -- Chinese securities companies should take an active part in the implementation of the One Belt, One Road strategy, and qualified brokerages will be supported to expand their services into global markets in line with clients' demands, said Liu Shiyu, chairman of China Securities Regulatory Commission (CSRC), at a meeting of the Securities Association of China on Saturday.
Securities companies must seize opportunities the Belt and Road initiative creates and open cross-border businesses in the en-route countries and regions, he added.
"In the meantime, China will open its domestic market to foreign organizations, and the commission will gradually ease its control on [stock] market access, and lift market interconnection efforts," Liu affirmed.
Brokerage companies must shift their operations' focus away from underwriting and share issue sponsorship toward rejuvenating existing assets through mergers and acquisitions, he stressed. They need to provide professional services for state-owned enterprise reforms, overcapacity reduction and exit 'zombie enterprises,' while contributing more to industry transformation and upgrade.
"The securities market will stagnate without innovation," he noted. Innovation must be carried out in a way that facilitates the development of the real economy, with effective compliance management and risk control ensured, he advised.
Securities companies should not use innovation to justify their violations of internal control and prudence regulations, he warned, otherwise financial markets will deviate from the real economy, leading to potential systemic risks.
These companies must hew to fundamental principles, ward off risk spillover, and create an orderly market environment, he stressed.
They should also effectively fulfill their investment protection obligations, and stop and report any illegal transactions discovered per law, he said.
Much room remains for improvement of self-discipline in the stock market, he said, adding that regulatory violations will be seriously investigated, and offenders publicly criticized, with their offenses noted in their credit records.