Shenzhen Stock Exchange to heighten supervision and management

The Shenzhen Stock Exchange pledged to establish a new risk management and supervision mechanism by playing up security agencies' role, according to a senior official at a media conference on Tuesday.

Fu Yan, director of the exchange's legal department, said a series of revisions has been made to the Constitution of the Shenzhen Stock Exchange, which was approved at its 2018 Members' General Meeting earlier this month.

One significant new rule is to require its members, major securities companies, to form a monitoring system for their clients, which include institutional and individual investors.

They need to "refuse to conduct abnormal transactions that could severely influence normal market orders," she noted.

Wang Yan, a council member for the exchange and president of China Merchants Securities Co Ltd, pointed out the regulation places new responsibilities on securities agencies. His company, as a representative of SZSE members, will carry out new management measures accordingly.

"We are now put into the frontline of preventing financial risks together with the exchange," he said. Wang believes a healthy investment environment will also benefit the company's own development.

The exchange announced it is also drafting detailed regulation to further implement a new member-based transaction behavior regulatory mode and will give specific examples of key monitoring entities and covered behaviors, as well as an incentive mechanism to members with "outstanding performances."

In addition, bond issuers were also included under the SZSE supervisory umbrella as a result of the annual meeting, providing legal grounds for the bourse to organize and supervise bond transaction.