Beijing Stock Exchange launches market-making trading on Monday

Beijing Stock Exchange. Photo: CFP

Beijing Stock Exchange. Photo: CFP

The Beijing Stock Exchange (BSE) launched market-making trading business on its stock market on Monday, in a further move to promote market reform and innovation, improve the market trading system, and enhance market vitality and resilience.

A total of 15 market makers have been approved by the China Securities Regulatory Commission for its market-making trading business of listed securities, 13 of them will participate in the trading business on the Beijing bourse, the BSE said in a statement on its website.

The introduction of the business will help reduce investors’ transaction costs while raising market liquidity and stability, according to the BSE.

The BSE has stepped up efforts to improve market functions since its establishment in November 2021. The bourse launched its first market index – the BSE 50 – in November. It also unveiled draft rules on introducing market makers to reduce transaction cost. The bourse halved the commissions it charges for stock trading to 0.025 percent of the transaction value from December.

On February 13, the stock exchange launched margin trading and securities lending transactions. By the end of 2022, it had 162 listed companies and more than 5.26 million qualified investors, the Xinhua News Agency reported.
A more important reform of China’s capital market, relevant rules for across-the-board registration-based IPO system came into effect on Friday, basically putting in place the institutional arrangements for the registration-based system, the China Securities Regulatory Commission (CSRC) said in a statement published on its website.

The rules involve simplifying listing requirements, optimizing registration procedures, improving the regulations on underwriting and on major asset restructuring of listed firms, strengthening oversight and law enforcement, and stepping up the protection of investors, according to the CSRC.

Yang Delong, former chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times that the registration-based system marks that the increasing maturity of China’s IPO environment, which will further promote deep reform of the domestic capital market and increase support for the real economy.

Meanwhile, de-listing rules will also be improved to force companies to exit the capital market for serious violations of law or poor corporate governance, according to Yang.