SSE Issues Business Rules and Supporting Business Guidelines for Market-making Trading of Stocks on the STAR Market

In order to implement the Implementation Opinions on Establishing STAR Market and Piloting Registration System in Shanghai Stock Exchange (hereinafter referred to as the Implementation Opinions), further promote the development of the STAR Market, pilot the registration system reform, and improve the trading system of the STAR Market, under the guidance of China Securities Regulatory Commission (CSRC), Shanghai Stock Exchange (SSE) today issued and implemented the SSE Detailed Rules for Implementation of Market-making Trading of Stocks on the STAR Market (hereinafter referred to as the Detailed Rules for Implementation) and SSE Guidelines for Securities Trading No. 8: Market-making of Stocks on the STAR Market, which makes more specific and detailed trading and supervision arrangements for the market-making trading of the STAR Market.

The launch of the market-making mechanism for the STAR Market is an important measure to continuously improve the basic system of the capital market and further play the role of a "test field" for the reform of the STAR Market. The Implementation Opinions propose to introduce the market-making mechanism when conditions permit on the basis of auction trading. Since its opening three years ago, the STAR Market has steadily piloted the registration system, and made coordinated efforts to reform basic systems such as issuance, listing, information disclosure, trading and delisting. The institutional arrangements have withstood market tests. The STAR Market has been running smoothly in the past three years. The introduction of the market-making mechanism can further enhance the liquidity of stocks on the STAR Market, improve market resilience and boost development of this market.

In accordance with the Pilot Regulations on Market-making Trading of Stocks on the STAR Market by Securities Companies (hereinafter referred to as Market-making Regulations) issued by CSRC in May 2022, the SSE has formulated the Detailed Rules for Implementation and supporting business guidelines, and solicited public opinions to the market. Market feedback shows that, market institutions actively supported the market-making mechanism to be launched on the STAR Market. They generally accepted the arrangements in the Detailed Rules for Implementation and the supporting business guidelines, and provided valuable comments and suggestions on specific business details. After careful consideration and thorough investigation, the SSE absorbed and adopted feasible opinions and suggestions from the market feedback. The revised Detailed Rules for Implementation contains 5 chapters and 28 articles. The main contents include: First, it clarifies the application and termination of market-making services. The application for market-making services for STAR Market stocks adopts a filing system. Securities companies qualified for market-making trading of listed securities may provide market-making services for specified stocks on the STAR Market after filing with the SSE. Second, it clarifies the rights and obligations of market makers. Market makers shall meet the SSE's requirements on market-making indicators when conducting market-making business. The SSE will regularly evaluate market makers and reward those who actively fulfill their obligations, such as reducing transaction fees appropriately. Third, it clarifies the supervision and management of market makers. Market makers shall improve their risk management and internal control systems, establish risk prevention and business isolation mechanisms, and ensure that market-making business is conducted in a compliant and orderly manner.

The introduction of market-making mechanism for the STAR Market is a useful attempt to further play the role of a "test field" for the reform of the STAR Market. Next, the SSE will actively promote the work related to the market-making mechanism of the STAR Market under the guidance of CSRC, make every effort to ensure the smooth and orderly implementation of the pilot work, and continuously promote the quality development of the STAR Market.


Notice of Issuing SSE Detailed Rules for Implementation of Market-making Trading of Stocks on the STAR Market
Notice of Issuing SSE Guidelines for Securities Trading No. 8: Market-making of Stocks on the STAR Market