At the securities company innovation and development seminar held in Beijing on May 8, Zhou Ming, general manager of the China Securities Depository and Clearing Corporation (CSDC), said that the CSDC is making active efforts to deepen innovation and improve services while the secure operation of the registration and settlement system is guaranteed, and plans to launch six measures to support the innovation and development of securities companies and the capital market.
      (1) To establish, improve and optimize a working system and mechanism in the CSDC to support securities companies’ innovative development. At present, the CSDC has set up development work leading groups for both the securities market and the off-board market. The two leading groups have set up their own office to be responsible for research, coordination, and the resolution of major depository and clearing issues occurring in the securities market reform or the development of the off-board market.
      (2) To vigorously support securities companies’ innovation in services and products and provide registration, clearing and depository services for new services and products on the securities market. In accordance with the relevant requirements of the China Securities Regulatory Commission (CSRC), the CSDC launches and improves a diversified portfolio of new products and services in response to the needs of securities companies and stock exchanges. These products and services include, but are not limited to, repo by quotation, repo by agreement, cash management products, cross-market ETF products, refinancing business, tiered asset management scheme products, etc.
      (3) To greatly optimize and diversify the settlement modes and provide flexible settlement services in response to the requirements of securities companies for innovation in services and products. The CSDC improves the registration and settlement system, promulgates and implements the Clearing and Settlement Rules, and improves the Rules for the Management of Clearing and Settlement Participants. The CSDC also speeds up the development and construction of the management platform for settlement agency participants and enhances the management and service level for settlement participants. The CSDC improves the settlement risk management system, strengthens delicacy management on settlement risks, and conducts research in establishing a scientific and reasonable evaluation system for quantifying settlement risks. The CSDC also introduces multiple settlement modes in addition to the traditional multilateral netting and bilateral netting modes. To meet the requirements of securities companies in product innovation for enhanced fund operation efficiency, reduced fund occupation cost, and a shortened fund settlement period, the CSDC has discussed with stock exchanges the introduction of a new settlement service for real-time trade-for-trade gross settlement in the daytime.
      (4) To vigorously promote interworking and interconnection between the stock exchange bond market and the inter-bank bond market, implement coordination between different settlement and custody platforms at different levels, and focus on the straight-through processing and efficiency of cross-market Tran-custody business. The CSDC has put forward a straight-through processing solution for the cross-market Tran-custody business of bonds and coordinated with related organizations, including the China Government Securities Depository Trust & Clearing Co. Ltd., Shenzhen Stock Exchange, and Shanghai Stock Exchange, in an effort to further enhance the cross-market Tran-custody efficiency for bonds and create a better environment for the launch of government bond futures and cross-market products.
      (5) To proactively construct the registration and settlement infrastructure and technical platform which can better fit into the innovative development of the industry from a global and long-term perspective. The CSDC has begun to develop a new generation of registration and settlement system. In accordance with the arrangement of the CSRC, the CSDC has also undertaken the construction of the Data Center for the Securities and Futures Industry and the Information Base for the Securities and Futures Industry. The CSDC aims to improve the responsiveness of background infrastructure to the innovative development of securities companies with the assistance of these platforms and infrastructure.
      (6) To carry out proactive and strategic research into solutions to long-term and outstanding issues. The CSDC will conduct in-depth research and actively propose solutions to long-term issues raised by securities companies and the market, such as normalized off-site account opening, a nominee holding system, a custody system for investors’ assets, third-party management on collaterals, registration and settlement of the over-the-counter market, registration and settlement of the derivative products, cross-border registration and settlement, etc.