National People's Congress Deputy and Peking University Boya Distinguished Professor Tian Xuan: Market-oriented reforms promote balanced investment and financing; gradually extend A-share trading hours

Reporter Guo Bohao, Securities Times

The reform of the independent director system has entered its third year, with performance and deep-seated issues coexisting. Topics such as deepening the comprehensive reform of capital market investment and financing, and optimizing the A-share trading system, have become hot topics of concern among all parties in the current capital market.

Recently, Tian Xuan, a National People’s Congress deputy and distinguished professor at Peking University, told Securities Times in an exclusive interview that efforts should be made to promote the coordination and balance of investment and financing through market-oriented reforms, using the revision of the Company Law as an opportunity to strengthen the foundation for independent directors to perform their duties, gradually and prudently extend trading hours for A-shares, and support the high-quality development and high-level two-way opening of China’s capital market.

Regarding the core direction of the comprehensive reform of capital market investment and financing, Tian Xuan stated that the current reform has entered a deep-water zone, and the key should focus on systematically advancing four major goals: enhancing institutional inclusiveness, balancing investment and financing, serving the real economy, and preventing and resolving risks.

Tian Xuan proposed to continue deepening the market-oriented reform of issuance and delisting systems, further improve the inclusiveness of the IPO registration system, accurately meet the financing needs of tech innovation enterprises, small and medium-sized enterprises, and private enterprises, while strictly enforcing delisting, improving normalized and diversified delisting mechanisms, and promoting a market ecosystem characterized by “entry and exit, survival of the fittest,” thereby fundamentally improving the quality of listed companies.

In response to the highly关注ed issue of balancing investment and financing, Tian Xuan suggested that efforts should be made in two areas. On one hand, regulate the financing behavior of listed companies, curb phenomena such as excessive financing and arbitrage in private placements, and guide financing funds accurately toward the real economy; on the other hand, continue to cultivate long-term institutional investors, strengthen professional institutions such as social security funds, insurance funds, and public funds, optimize the investor structure, and enhance the long-term investment value of the market.

At the same time, efforts should be made to promote high-level two-way opening of the capital market, further align with international trading rules and regulatory standards, optimize connectivity mechanisms, expand the inclusion of A-shares in international indices, attract more long-term overseas capital, strengthen the protection of the legal rights of small and medium investors, establish diversified compensation mechanisms, significantly increase the cost of violations in the capital market, and build a comprehensive risk prevention and control system.

The reform of the independent director system is a key measure to improve corporate governance. Regarding the current status of performance over the past three years of the reform, Tian Xuan admitted that while the capabilities and awareness of independent directors have visibly improved, three core issues still restrict the effectiveness of the system. First, the imbalance in responsibilities and rights— the current situation of “emphasizing accountability and neglecting safeguards” has not fundamentally changed; the responsibilities of independent and non-independent directors are not differentiated, and methods for information access and independent verification are limited. Second, the nomination and management process is unstandardized, often dominated by controlling shareholders or management, resulting in insufficient independence, with no unified standards for qualification, and uneven professional capabilities. Third, there is insufficient coordination between supervision and self-discipline, mainly relying on post-event administrative accountability, with a lack of authoritative support for self-regulation, and the performance evaluation system is still imperfect.

Tian Xuan stated that the revision of the Company Law is a critical opportunity to improve the independent director system, with the core focus on resolving three major issues: unclear institutional positioning, ambiguous responsibilities and rights boundaries, and lack of legal basis for performance safeguards. He suggested that the law should explicitly stipulate the statutory requirements for establishing independent directors in listed companies, including the proportion of independent directors and professional background thresholds, to eliminate superficial “formal” appointments; define responsibilities with “joint but distinguishable” boundaries, reasonably assign responsibilities based on information access, effort投入, and subjective fault, clarify exemption circumstances to alleviate concerns about performance; legally grant independent directors rights such as independent information access and the hiring of intermediary agencies, and clarify the performance保障 obligations of listed companies. Additionally, he recommended leaving space in the law for a national independent director association guided by the CSRC, to supplement regulatory gaps through industry self-discipline, establish a unified qualification and training system, and improve responsibility保障 and risk mitigation mechanisms for independent directors.

Regarding the hotly debated topic of extending trading hours for A-shares, Tian Xuan pointed out that extending trading hours is an inevitable choice for deepening the two-way opening of the capital market and expanding market size. It can help the Shanghai and Shenzhen stock exchanges gain global pricing power for Chinese listed companies and improve asset pricing efficiency, as well as alleviate information asymmetry across markets and better protect the rights and interests of small and medium investors.

Tian Xuan emphasized that extending trading hours should be implemented gradually and not in a one-size-fits-all manner. He proposed a three-step approach: first, extend the afternoon closing time to 4 p.m., synchronized with the Hong Kong market; second, extend the morning休市 to 12 p.m., increasing daily trading hours to 5.5 hours; third, depending on market adaptation, consider opening earlier to increase overlap with Asia-Pacific markets. Additionally, measures such as完善 trading rules for the new trading periods, strengthening digital and intelligent监管, promoting upgrades in intermediary services, enhancing investor education, and establishing跨-market emergency response mechanisms should be implemented to control potential risks within manageable limits and balance market activity with stability.