The latest announcement from the CSRC! Response status of 4 proposals and suggestions from the Two Sessions

On February 28, the China Securities Regulatory Commission (CSRC) publicly released responses to suggestions from the 14th National People’s Congress and proposals from the 14th Chinese People’s Political Consultative Conference. There are four responses covering topics such as leveraging Hong Kong’s financial advantages to empower high-quality private sector development, optimizing the variety of interconnection products, ESG information disclosure by listed companies, and pilot cities for financial technology innovation in capital markets.

In response to the proposal on “Utilizing Hong Kong’s Financial Advantages to Empower High-Quality Private Sector Development,” the CSRC stated that it will further strengthen regulatory coordination and linkage based on existing mechanisms, improve regular communication with overseas regulators, enhance filing management efficiency, support companies’ overseas financing, and encourage enterprises to make good use of both markets and resources to better integrate into the international economic stage with a more open attitude.

Enhancing Filing Management Efficiency to Support Overseas Financing

Regarding the proposal on “Utilizing Hong Kong’s Financial Advantages to Empower High-Quality Private Sector Development,” the CSRC emphasized that private enterprises are China’s largest foreign trade entities, accounting for 80% of foreign trade companies and contributing over half of the total foreign trade value, serving as the main force in stabilizing foreign trade. Financial regulators are earnestly implementing the decisions of the Party Central Committee and the State Council, highly valuing and actively supporting financial services for the real economy, and unwaveringly promoting high-level opening of the capital market.

In recent years, the CSRC and Hong Kong Securities and Futures Commission (SFC) have continued to strengthen cross-border regulatory cooperation, signing the “Memorandum of Cooperation on Strengthening the Regulation of Mainland Companies Listing in Hong Kong.” They have refined mechanisms for regulation in areas such as Hong Kong IPOs, law enforcement cooperation, intermediary supervision, and information exchange. These mechanisms have operated well, effectively supporting domestic companies’ financing and development in Hong Kong. Since the implementation of the “Interim Measures for the Administration of Securities Issuance and Listing by Domestic Enterprises Abroad” on March 31, 2023, operations have been smooth and orderly. By the end of March 2025, the CSRC had issued filing notices to 117 companies listed in Hong Kong, with 99 companies successfully listed there through filings, raising a total of HKD 118.1 billion (approximately RMB 108.1 billion). As a vital bridge connecting China’s mainland capital markets with the world, Hong Kong has become the primary overseas listing destination for mainland enterprises.

The CSRC stated that moving forward, to better support private enterprises in utilizing Hong Kong’s capital markets for financing and development, financial regulators will continue guiding banks, securities firms, and insurance companies to meet private sector needs, strengthen cooperation with Hong Kong financial institutions, innovate financial products and services, and help private enterprises expand overseas markets, enhance international competitiveness, and respond to trade frictions. Industry associations will be guided to strengthen financial talent exchanges, laying a solid foundation for long-term coordinated development. Based on existing mechanisms, the CSRC will further enhance regulatory coordination and communication with overseas regulators, improve filing management, support companies’ overseas financing, and encourage enterprises to leverage both markets and resources with a more open approach to integrate into the global economy.

In another response to the proposal on “Optimizing the Variety of Interconnection Products,” the CSRC indicated that to support Hong Kong’s development as an international financial center and deepen financial cooperation between the mainland and Hong Kong, it revised and issued the “Hong Kong Mutual Recognition Fund Management Regulations” on December 20, 2024. The revision relaxed restrictions on the sales ratio of mutual recognition funds and the delegation of investment management functions, and reserved space for including more routine products within the scope of Hong Kong mutual recognition funds. The CSRC will continue to monitor the implementation of these new regulations and evaluate their effectiveness.

Promoting the Use of Third-Party Verification or Audit for ESG Reports

In response to the proposal on “Accelerating the Disclosure of ESG Information by Listed Companies and Addressing Existing Issues,” the CSRC stated that it will guide stock exchanges to continuously summarize best practices among listed companies, strengthen dynamic assessments of the guidelines for sustainable development report disclosures, and improve the rules’ adaptability, effectiveness, and operability, thereby establishing a more comprehensive disclosure system for corporate sustainability information.

The CSRC also emphasized promoting the use of third-party verification or audit for ESG reports. The guidelines encourage listed companies to introduce third-party verification or audit to improve disclosure quality, and specify requirements for the independence, experience, and qualifications of third-party agencies, as well as the scope, basis, and main procedures of verification or audit reports. The CSRC will continue to monitor international and domestic standards, rules, and practices related to sustainability verification.

Additionally, in response to the proposal on “Supporting Hefei City in Creating a Pilot City for Financial Technology Innovation in Capital Markets,” the CSRC noted that since 2021, it has conducted pilot projects in Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing, Jinan, Chengdu, and Zhejiang. As of May 2025, these eight pilot regions have announced 122 projects, with 22 projects withdrawn, one completed, and 99 projects still under supervision, all operating smoothly. These projects involve various business scenarios such as fund sales, contract transfers, trading settlement, and investment research and advisory, utilizing technologies like artificial intelligence, big data, blockchain, and cloud computing, with deep integration of new information technologies and traditional business.

The CSRC announced that on April 29, 2025, Hefei became the ninth city to pilot financial technology innovation in the capital market. The next step will be to guide the Anhui Securities Regulatory Bureau, in collaboration with Anhui Province and Hefei local government departments, to establish a Hefei-based working group for financial technology innovation pilot work, ensuring the successful development of Hefei’s pilot initiatives.

(Source: Securities Firms China)