Commentary
BEIJING – The Shanghai Stock Exchange announced on Tuesday the suspension of the initial public offering (IPO) of Ant Group, demonstrating that China takes a responsible attitude to maintaining the stability of the capital market.
The exchange said that the group had reported major issues, including changes in the fintech supervision environment, which may result in it failing to meet listing or information disclosure requirements. In this case, preventing Ant Group from going public hastily is a responsible move. The action embodies the spirit of respecting the market and the rule of law, shedding light on why the decision enjoys broad public support.
There have been increasing public discussions in China recently over issues caused by large tech firms moving into the financial space, with the vital interests of thousands of investors at stake. The decision to suspend the IPO demonstrates China’s resolution to curb risks and protect investors’ interests. The decision is necessary, reasonable and legal, and will benefit the capital market in the long run, while boosting trust and confidence among domestic and overseas investors.
Fintech innovation has played an important role in empowering inclusive finance and improving the efficiency of finance in serving the real economy. However, the development of fintech also brings some risks and challenges, which requires a good balance between financial innovation and supervision.
The recently published draft rule for small online lenders and the suspension of the Ant Group listing provide an opportunity for regulators to signal the importance of building an inclusive and prudent system for supervision and innovation. The regulators take a “zero tolerance” approach to regulatory arbitrage and financial mess, and will make all-out efforts to protect the legitimate interests of financial consumers and investors.
For issuers and agencies, it is important to strike a balance between financial development and financial security. They must fully assess the issues and risks and take effective precautions to safeguard stable financial development. Companies should learn to develop business opportunities while following the regulations and mitigating potential risk, becoming adaptive to the changing environment.
Strict regulation of China’s financial industry will help the financial market weather the tests of the economic cycle and external headwinds. With mankind entering a new era of interconnectedness, in which the interests of the different markets are intertwined, the stability of China’s financial market can also benefit the global financial market and bring certainty to other countries.
Despite rising protectionism and the disruptions of the COVID-19 pandemic, China has been unwavering in opening up its financial sector, honoring its promise to lift restrictions in a number of fields. Responsible regulatory actions that match the level of opening-up will strengthen investors’ confidence in the industry and offer predictable opportunities to the world. – Xinhua
