According to the Central Economic Work Conference that concluded in Beijing on Friday, China will comprehensively carry out pilot reform of market-based allocation of production factors and fully implement the stock issuance registration system.

This is a key measure to develop direct financing, especially equity financing. As a key institutional building measure of the 14th Five-Year Plan (2021-25), the inclusion of the registration system means reform in this area will be accelerated.

Compared with the implementation of the approval system for the A-share stock market, the stock issuance registration system has stricter information disclosure norms.

The reform of the stock issuance registration system has been steadily advancing in recent years. This is the third year of the pilot registration system for the capital market, which started with the Science and Technology Innovation Board and then included the Growth Enterprise Board.

At present, there are 561 listed companies under the registration system, with total financing of 624.3 billion yuan ($98.11 billion).

The regulators have also promoted reform in key institutional sectors with high innovation possibilities such as trading and delisting, facilitated the revision of the securities law and criminal law, introduced the class action lawsuit system, and improved the "zero tolerance" law enforcement and judicial system. A series of positive changes have made the pilot registration system a success.
To ensure the success of the registration system reform, the authorities should ensure law-based governance of the stock market. And to promote the reform of the main board registration system, they should take into consideration the weaknesses of individual investors in independently identifying and judging market risks.

However, the comprehensive implementation of the registration system for stock issuance does not mean the relaxation of audit requirements.

The regulatory authorities must strictly check the authenticity and accuracy of information disclosure, improve the quality of listed companies at source, and fundamentally reduce market investment risks. They should also ensure intermediary agencies that violate the laws and regulations receive stricter punishment, so that they can truly become the "gatekeepers" of the capital market.

The comprehensive implementation of the registration system will be an important indication of the maturity of China's securities market and enable more social funds to be converted into enterprise capital, improve enterprises' technological innovation capacity, and help the financial market to better serve the real economy.

- BEIJING YOUTH DAILY