China Securities Regulatory Commission plans approval of first 18 active ETFs and new market oversight measures

In remarks at the Financial Street Forum, the China Securities Regulatory Commission outlined plans to approve registration of the first 18 actively managed exchange-traded funds (ETFs) on Oct. 19, advancing plans presented at the Lujiazui Forum in June to introduce these products on mainland exchanges. It also set out forthcoming measures on fund supervision, artificial intelligence and investor protection. The broader agenda combines market stability measures with reforms to financing and cross-border investment access. Four supervisory initiatives are planned in the near term. A fund industry monitoring center would register private fund interests, collect information on public and private funds, and monitor risks. Guidance on safe and compliant artificial intelligence use in securities and futures would address business conduct and data security, including applications in risk management and investment research. Revised penalties for unlawful share reductions would clarify assessment standards and make enforcement more proportionate. Separate guidance on advance compensation to investors would specify eligible entities and implementation procedures. The commission also highlighted risks from offshore leveraged products linked to individual A-shares and plans to broaden the sources and channels of long-term investment capital. Financing reforms would make listing and merger rules more accommodating and advance revisions to securities issuance registration rules for listed companies, continuing the refinancing reforms discussed in June. Planned listed-company regulations would strengthen governance, disclosure and investor protection. Cross-border priorities include easier investment operations for Qualified Foreign Institutional Investors and work to include renminbi stock trading counters and real estate investment trusts in Stock Connect. For the Beijing Stock Exchange, planned measures include ETFs tracking the Beijing Stock Exchange 50 Index and allocation of new shares based on investors’ existing shareholdings, alongside innovation assessment standards and changes to National Equities Exchange and Quotations market tiers.