Riding the Market Tide

2. How beneficial has the Shanghai-Hong Kong Stock Connect been to both foreign and Chinese investors? What benefits will the Shenzhen link bring?

Since its launch in November 2014, the Shanghai-Hong Kong Stock Connect has spurred a close linkage between A-shares and Hong Kong shares. The Shenzhen-Hong Kong Stock Connect's launch on December 5, 2016 further deepens the ties between A-shares and H-shares. Through Hong Kong's links with both the Shanghai and Shenzhen bourses, Chinese capital will have the opportunity to participate in the more open, mature and rational Hong Kong financial market. Meanwhile, foreign investors will have another means, in addition to the qualified foreign institutional investor (QFII) program, to invest in onshore stock markets, widening the channels open to foreign capital for investment and participation in the Chinese securities market. Although the number of companies covered by the Shanghai and Shenzhen-Hong Kong Stock Connects still remains limited and a sound investment system has yet to be established, we are confident that this will gradually open and become more internationalized and that, in future, it will not only attract more foreign investors into Chinese capital markets but will also attract global enterprises to elect to list in China.

3. Will the trend of Chinese companies delisting from U.S. exchanges and relisting on A-share markets continue? Why or why not?

Given the sharp fluctuations in the U.S. stock markets and the cold shoulder turned toward China concept stocks in the U.S. and their less than ideal performance in recent years, coupled with advantages such as higher valuations on the A-share markets, many China concept stocks have either returned—or signaled to return—home since 2014.

The large number of enterprises waiting in line for initial public offerings (IPOs) has created uncertainty in the amount of time required to list. Until recently, the main method adopted by returning China concept stocks has been backdoor listings. However, in 2016, the CSRC issued circulars to its regional branches and the Shanghai and Shenzhen Stock Exchanges on tightening the regulation of backdoor listings and revised the rules for such listings (see Question 4) . The stricter backdoor listings rules have increased the difficulty and time required, and many returning enterprises have slowed down their A-share listing schedules and are now taking a much more cautious approach. We anticipate that the continuing pace of China concept stocks returning to A-share markets will probably slacken somewhat compared with one or two years ago.

4. How has the CSRC further regulated backdoor listings this year?

The CSRC's adjustments to backdoor listings in 2016 have been widely labeled by the market as “the most stringent regulation of backdoor listings ever”. Tighter regulatory arrangements for the entire chain, and all stages and entities involved in a restructuring-listing are taking shape.

The first substantive step in this regulatory show of force was the revision of the Measures for the Administration of Material Asset Restructurings of Listed Companies. These revisions mainly include five aspects: (1) improving and detailing the criteria for defining backdoor listings, such as for defining a change in the control of a listed company and determining the scale of assets purchased; (2) eliminating ancillary financing for backdoor listings so as to strengthen the requirements for the strength of the restructuring party; (3) increasing the share lockup period of the parties involved in the restructuring, such as financial advisors, lawyers and accountants; (4) making listed companies and relevant intermediary firms, such as financial advisors, lawyers and accountants, more accountable ; and (5) specifying that the CSRC will issue separate regulations for backdoor listings that involve the acquisition of assets in specific industries, such as finance and venture capital, but to date, no detailed regulations have been issued.

The CSRC also issued documents to enhance first-line regulation by the stock exchanges, strengthen onsite inspections by local securities regulators, intensify regulatory law enforcement and reinforce service coordination by the listing department of the CSRC. The requirements that have attracted the most attention include: (1) a press conference must be held before resumption of trading of the restructuring-listing project, so as to enhance the scrutiny by the media and retail investors; (2) full coverage inspections of past restructuring-listings must be conducted so that corrections of any previous errors are implemented and liability is thoroughly pursued; and (3) the suspension or termination of a restructuring plan does not exempt statutory liability, and if a project possibly involves financial fraud, false restructuring or other violations, the principle of “disclosure and liability for what is disclosed” will be upheld, all with the aim of strictly enforcing the regulators' recent direction and principles relating to information disclosure.

5. The CSRC and AMAC have invited foreign private securities investment funds to apply for domestic licenses this year. How will this impact the asset management industry and what's next in terms of liberalization?

The CSRC and AMAC permit qualified wholly foreign-owned and joint venture enterprises to apply and register as privately-raised investment fund management firms and will gradually raise the ceiling on the percentage of shares foreign-funded financial institutions can hold in securities companies and fund management companies. In future, the restrictions on foreign-invested private asset management firms engaging in asset management businesses will be further lowered and foreign firms' participation in Chinese investment activities will be freer and more convenient. This will bring new ideas and management expertise to private asset management in China and will aid in enhancing the competitiveness and global influence of China's asset management industry.

This liberalization will also further simplify the examination and approval or record filing procedures for private asset management firms and products, as well as strengthen market regulation and investor protection. Chinese regulators will treat wholly Chinese-invested and foreign-invested asset management firms equally, providing foreign-invested private asset management firms a fairer, more impartial and transparent investment environment.

6. How can foreign investors benefit from the PBOC's interbank bond market opening?

As an important focus of China's economic reform, the PRC government continues to promote the opening of the interbank bond market to foreign investment to spur the internationalization of the renminbi and promote the development and growth of China's financial market. In February this year, the People's Bank of China (PBOC) published an announcement specifying that all foreign investment firms can invest in China's interbank bond market, eliminated restrictions on investment amount limits and simplified procedures. Subsequently, the Shanghai Head Office of the People's Bank of China formulated specific detailed rules for the record filing of foreign investors, and the State Administration of Foreign Exchange also issued a complementary circular on the entry and exit of foreign exchange.

This opening of the interbank bond market bodes well for international investors, specifically presenting renminbi fund investors with opportunities for higher returns. It enriches the investor structure of the interbank bond market and allows for international integration in terms of system standardization, infrastructure construction, intermediary firm development and market regulatory regime advancement.

7. What is your outlook for the market over the next 12 months? What are the major trends you see emerging?

On the whole, we anticipate that, in the coming 12 months, there may be a discrepancy in the speed and heat of development in the different capital market segments, but they will all see “the survival of the fittest”.

With respect to IPOs, the second half of 2016 witnessed a quiet increase in the pace of new share offerings, the number of approved enterprises and the amount of offering proceeds. In the overall environment where the CSRC has implemented full coverage inspection and supervision of offerings—particularly shaken by law enforcement actions targeting fraudulent IPOs and information disclosure that violates laws and regulations—companies whose performances have dropped significantly as well as those applying for IPOs with inadequate disclosure have been forced out one after another. This will not only aid in enhancing the quality of enterprises that are proposing to list and balance the supply and demand for new share offerings, but also allow for an optimal allocation of IPO review resources, further accelerating new offerings. These will be major trends in the IPO market in 2017.

Refinancing by listed companies through means such as additional offerings will continue to be vibrant in 2017. What may change, however, depending on macro factors in various industries of the real economy, enterprise values and market expectations, is that listed companies will be more prudent in using the proceeds from refinancing. Among the key factors for determining the success of failure of a refinancing, greater weight will be placed on the effectiveness and returns of proceeds raised from previous offerings as well as the investment directions of the proceeds to be raised from the proposed refinancing. Doing so will not only boost their main business operations, but also their expansion and innovation plans.

Backdoor listings will remain an important means for enterprises to enter the A-share market. As we see it, the tightening, adjustment and standardization of the regulation of restructuring-listings by the CSRC and the Shanghai and Shenzhen Stock Exchanges have actually had the effect of “skimming the bubbles off the capital markets”. In other words, the crackdown on speculation has put material asset restructurings of listed companies back on the path of lawfulness, compliance and transparency. For enterprises that genuinely need to carry out a backdoor listing, the enhanced regulation will reduce their restructuring costs and, from another perspective, will also revitalize the listed company resources and the overall capital markets. With all this in mind, backdoor listings will remain hot in 2017.

The New Third Board was traditionally the first choice of new emerging enterprises. However, in recent years, the requirements for listing on the New Third Board have become more and more stringent, the delay and financial costs borne by enterprises seeking listings have markedly increased, and phenomena such as the current stagnant trading on the New Third Board market and the relatively poor market liquidity have negatively impacted enterprises' financing, greatly reducing the board's appeal. Although a series of national policies have been issued since the beginning of 2016 to improve the functions of the New Third Board market, they still require further detail and implementation so market participants will take a wait-and-see approach. Certain quality enterprises may even change their strategy entirely and aim directly for the A-share market. Some of the heat of the New Third Board market is therefore expected to dissipate in 2017.

1. 在合规和信息披露方面，对证券发行公司加强了什么要求？

2016年，中国证监会以及沪深交易所均全面提高了证券发行合规以及信息披露要求：

一是在严格执行有关信息披露的真实性、准确性、完整性和及时性等一般性要求的同时，监管机构将执法过程中所查处的证券发行违法违规行为作为反面教材，强调在证券发行及信息披露方面不得存在或必须避免的违法违规情形。

二是沪深交易所均分别出台或修订信息披露以及停复牌相关制度或规定，强化信息披露的针对性和有效性，以及监管透明度。

2. 沪港通对中外投资者带来了哪些效益？深港通又会带来什么裨益？

沪港通自2014年11月开通以来，带动A股和港股之间的紧密联动。深港通亦于2016年12月5日启动，进一步加深A股和港股之间的紧密联系。伴随着沪港通和深港通的开通，中国的资本将有机会走出去，参与到更为开放、成熟和理性的香港金融市场的舞台中。另一方面，借由沪港通和深港通，外国投资者拥有了除境外合格机构投资者(QFII) 等以外的一种新的投资中国股票市场的方式，进一步丰富了境外资本投资参与中国证券市场的途径。与此同时，我们也应该看到目前沪港通及深港通所涵盖的公司数量仍然有限，尚未建立起一套完整的投资体系。但我们相信，这个舞台必将逐渐开放和国际化，希望未来不仅吸引更多的外国投资者进入中国资本市场，也可以吸引优秀的国际企业选择在中国资本市场上市。

3. 中资公司在美国退市回归A股市场的趋势会持续吗？

鉴于美股市场的剧烈波动以及近年来中概股在美所受冷遇及其表现不尽如人意，并对比A股市场高估值等方面的优势，中概股自2014年起已陆续回归或表示打算回归A股市场。

由于A股IPO排队待审企业数量众多，实现最终发行上市所需时间可能较难估算，因此，过往中概股回归所采取的主要方式是借壳上市。然而，2016年内，中国证监会向各地监管局以及沪深交易所下发有关严格借壳上市监管工作的相关通知(见问题4)，借壳上市趋紧趋严，难度相应增加，且所需时间相较以往延长，直观表现为近期回归的中概股企业多亦相应放慢了其A股上市进程且更加谨慎，因此，我们预期后续中概股回归并登陆A股市场的节奏相较一两年前将可能有所放缓。

4. 今年中国证监会如何加强对借壳上市的监管？

中国证监会2016年对于借壳上市的监管调整被市场普遍评论为 “史上最严借壳上市监管”，通过此次调整，严格重组上市全链条、全环节、全主体的监管安排亦得以形成。

该等监管发力的实质性第一步，即是对《上市公司重大资产重组管理办法》进行修改，此次修改主要包括五个方面：（1）完善借壳上市认定标准，包括细化上市公司控制权变更认定标准以及完善购买资产规模的判断标准，（2）取消借壳上市的配套融资，以提高对重组方的实力要求，（3）延长重组相关方的股份锁定期要求，（4）强化对上市公司及相关中介机构的问责力度，以及（5）明确借壳上市涉及收购资产为金融、创业投资等特定行业的由中国证监会另行规定，但截至目前尚未有细化规定出台。

与此配套，中国证监会下发相关通知强化证券交易所的一线监管，加强各地证监局的现场检查，严格监管执法以及中国证监会上市部加强服务协调等四个方面，其中最为引人注目的要求在于：（1）重组上市项目复牌前应当召开媒体说明会，以此强化媒体和公众投资者对重组上市的监督机制；（2）对既往重组上市项目全覆盖检查，通过“回头看”落实历史项目纠错纠偏，彻底追责；以及（3）重组方案中止或终止不得豁免法定责任，对于相关项目是否涉嫌财务造假、是否涉嫌忽悠式重组或其他违法违规问题，强化披露即负责的原则，以此落实近期监管机构有关信息披露的监管导向和原则。

5. 中国证监会和基金业协会今年鼓励外资私募证券投资基金申请登记成为国内机构。此举措如何影响资产管理业，下一步的开放进程将如何发展？

中国证监会、基金业协会允许符合条件的外商独资和合资企业申请登记成为私募证券基金管理机构，同时会逐步提高符合条件的外资金融机构参股证券公司和基金管理公司的持股比例上限。将来外资私募资产管理机构从事资产管理业务的限制将进一步减少，外资机构参与中国境内的投资活动将更加自由、便捷，这将给国内私募资产管理带来新的理念和管理经验，有助于提升中国资产管理行业的竞争力和国际影响力。

在未来自由化的进程中，私募资产管理机构和产品的审批或备案手续将进一步简化，市场监管和投资者保护同步加强，中国监管机构将平等对待内、外资资产管理机构，为外资私募资产管理机构提供更加公平、公正、透明的投资环境。

6. 外资如何受惠于人民银行对银行间债券市场的开放？

作为中国经济体制改革的重要内容，中国政府持续促进银行间债券市场的对外开放，以推动人民币国际化及促进我国金融市场自身发展壮大。今年2月份，央行更是发布公告规定，境外所有投资机构都可以投资间中国银行间债券市场，并且彻底取消额度限制，简化程序。随后中国人民银行上海总部制定了具体的境外投资者备案细则，国家外汇管理局亦发布了关于外汇进出的配套通知。

上述银行间债券市场的对外开放为国际投资者提供了更多的机会，特别是对持有人民币资金的投资者可提供更高收益的投资机会；亦有利于境外投资者丰富银行间债券市场的投资者结构；有利于银行间债券市场在制度规范、基础设施建设、中介机构发展以及市场监管体系建设等方面的国际融合。

7. 您对于市场在未来12个月有什么展望？您看到有什么主要趋势在呈现？

整体而言，我们预期，未来十二个月资本市场的各大板块的发展速度和热度可能存在差异，但均将呈现“优胜劣汰”的态势。

就IPO而言，2016年下半年新股发行悄然提速，核发企业数量和募集资金金额亦相应上升。在中国证监会对发行监管实施全覆盖核查的大环境下，特别是受到IPO欺诈发行及信息披露违法违规专项执法行动的震慑性影响，业绩大幅下滑的企业以及信息披露存在缺陷的申请IPO企业纷纷出局。这在一方面有助于提高拟上市公司质量，平衡新股发行的供求关系，另一方面将更有利于优化IPO审核资源的配置，进而推进新股发行的持续加速。我们认为，前述亦将是2017年新股发行市场的一大趋势。

上市公司通过增发等方式进行再融资在2017年仍将继续活跃，但可能与此前不同的是，受限于实体经济中各行业所处宏观环境、企业估值以及市场预期等因素，各上市公司在考虑再融资募集资金使用方面将更为审慎，且前次募集资金使用效率和效益以及再融资募集资金投向在决定上市公司再融资成败的各关键因素中的权重将进一步增加。从另一个角度而言，这也将变相对上市公司深化其主营业务经营以及进行业务拓展和创新起到推动作用。

借壳上市仍将是企业登陆A股市场的重要途径之一。在我们看来，中国证监会及沪深交易所有关重组上市监管的严化调整和规范实际起到了“撇去资本市场泡沫”的作用，换言之，对重组上市中各种投机炒作行为的打击，起到了促使上市公司重大资产重组回归合法合规、公开透明的作用。这对于真正有需要进行借壳上市的企业而言，从整体上是降低了其重组成本，也是从另一方面鼓励该等企业盘活上市公司资源，活跃资本市场。因此，我们认为，借壳上市在2017年将热度不减。

在过往年度中，新三板往往是部分新兴企业的首选。然而，近年来，新三板的挂牌条件要求越来越严，拟挂牌企业面临的时间及经济成本明显增加，而目前新三板市场交易低迷、市场流动性欠佳等现象使得企业融资功能受到极大影响，进而使得该等市场对于企业的吸引力明显下降。虽国家自2016年以来推出一系列改善新三板市场功能的相关政策，但鉴于目前尚待细化落实，因此企业及投资人等市场主体可能将采取观望状态，或对于部分优质企业而言，其将可能改变策略，直接以A股市场为目标。因此，我们认为，2017年新三板市场热度将会有所降温。