Impact Analysis of the Implementation of the Measures for the Implementation of Supervision and Administration Measures in the Securities and Futures Market on the A-share Market

Based on the information you provided and relevant market data, I will systematically analyze the impact of the implementation of the Measures for the Implementation of Supervision and Administration Measures in the Securities and Futures Market on the A-share Market from three dimensions: investment risk assessment, compliance costs of listed companies, and overall market valuation levels.

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The Measures clarify fourteen types of supervision measures, including ordering corrections, regulatory interviews, issuing warning letters, ordering regular reports, etc. This

will significantly improve market transparency. Investors can more accurately assess the compliance risks and governance quality of listed companies through public supervision measure information.

The Measures emphasize the principle of ‘combining risk prevention and control with education’, which means:

• Explicitization of violation costs
  : The standardization of supervision measures enables investors to quantitatively assess the potential impact of violations on stock prices
• Improved risk early warning capabilities
  : Measures such as ordering regular reports help investors obtain company risk information in a timely manner
• Differentiated pricing
  : Companies with good compliance status will receive valuation premiums, while companies repeatedly subject to supervision measures will face discounts

According to market data, the Shenzhen Component Index (399001.SZ) has dropped from 11.79 points to 11.41 points in the past 30 trading days, a decrease of 3.22%, with a volatility of 0.71%[0]. Under the new regulatory framework:

• Value investment strategies benefit
  : Corporate governance and compliance quality will become core considerations for long-term investment
• ESG investment concept is strengthened
  : The implementation of supervision measures is highly consistent with the ESG investment concept
• Importance of active management is enhanced
  : Investors need to strengthen their ability to track and analyze regulatory announcements

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The Measures will lead to increased investment by listed companies in the following aspects:

Cost Category	Specific Content	Impact Level
System Construction	Improve internal control systems and compliance management systems	High
Staffing	Add compliance positions and professional training investment	Medium-High
Information Disclosure	Preparation costs for regular reports and special explanations	Medium
Technical Systems	Compliance monitoring systems and risk early warning platforms	Medium-High
External Services	Fees for professional institutions such as legal and financial services	Medium

• Diversion of management attention
  : Management needs to invest more energy in responding to regulatory requirements, which may affect business innovation
• Prolonged decision-making process
  : To avoid regulatory risks, company decisions may tend to be conservative
• Differentiation of financing costs
  : Companies with good compliance records will have relatively lower financing costs

Companies of different sizes and types will face differentiated compliance cost pressures:

• Large listed companies
  : Compliance infrastructure is relatively complete, with low marginal costs
• Small and medium-sized listed companies
  : Compliance investment accounts for a relatively high proportion of revenue, with relatively greater pressure
• Highly regulated industries such as finance and pharmaceuticals
  : The absolute value and proportion of compliance costs are significantly higher than other industries

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According to the latest market data, the performance of A-share market sectors shows a differentiated trend [0]:

Sector	Performance
Leading Sectors	Real Estate (+0.57%), Basic Materials (+0.47%), Communication Services (+0.23%)
Declining Sectors	Finance (-0.60%), Healthcare (-0.35%), Utilities (-0.24%)

The Measures will promote the shift of the valuation system from ‘concept-driven’ to ‘quality-driven’:

Growth Expectation     ████████████░░░░░░░░  60% → 50%
Corporate Governance     ████░░░░░░░░░░░░░░░░  20% → 30%
Financial Quality     ██████░░░░░░░░░░░░░░  40% → 35%
Compliance Risk     ░░░░░░░░░░░░░░░░░░░░   5% → 15%

• Industry leading companies
  : Compliance advantages will be converted into valuation premiums
• State-owned blue chips
  : Relatively standardized governance structure, benefiting from improved regulatory environment
• Financial sector
  : Although under short-term pressure (down 0.60% today), it will benefit from industry standardization in the long run

• High-valued growth stocks
  : Compliance uncertainty may suppress valuation bubbles
• Companies with frequent violations
  : Records of supervision measures will directly suppress valuation levels
• Small-cap stocks with imperfect governance structures
  : Liquidity discounts may further expand

The long-term impact of the Measures will be reflected in:

• Short-term
  : Some companies will see valuation downgrades due to compliance concerns
• Medium-term
  : Market valuation structure is optimized, and valuations of high-quality companies are improved
• Long-term
  : The overall valuation level of A-shares approaches that of mature markets, and
  compliance premium
  becomes an important part of valuation

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Impact Dimension	Short-term Impact (1-6 months)	Medium-term Impact (6-18 months)	Long-term Impact (18+ months)
Investment Risk Assessment	Increased regulatory uncertainty	Improved risk pricing mechanism	Improved risk identification efficiency
Compliance Costs	Concentrated investment phase	Stable cost structure	Scale effect emerges
Market Valuation	Differentiation intensifies, volatility rises	Structure optimized, quality-driven	Rational pricing, compliance premium becomes important

1. Establish a regulatory tracking system
   : Incorporate supervision measures into investment research and risk control processes
2. Optimize stock selection models
   : Increase the weight of compliance quality and reduce the weight of pure financial indicators
3. Proactively participate in corporate governance
   : Use shareholder rights to promote companies to improve compliance levels

1. Pay attention to regulatory announcements
   : Regularly check the supervision measure records of listed companies
2. Prefer companies with good compliance
   : Focus on companies with perfect governance structures and no violation records
3. Avoid high-risk targets
   : Be alert to companies frequently subject to supervision measures

The implementation of the Measures for the Implementation of Supervision and Administration Measures in the Securities and Futures Market marks the entry of the A-share market into a new stage of

. Although it may bring about increased compliance costs and market fluctuations in the short term, in the long run, it will:

• ✅ Improve the overall operational efficiency of the market
• ✅ Optimize the resource allocation function
• ✅ Enhance the confidence of international investors
• ✅ Promote the transformation of the A-share market to a mature market

Investors should actively adapt to this new regulatory normal and incorporate compliance factors into the core consideration system of investment decisions.

[1] China Securities Regulatory Commission - Public Consultation on Measures for the Implementation of Supervision and Administration Measures in the Securities and Futures Market (2025)
[2] Interpretation and Analysis of the Measures for the Implementation of Supervision and Administration Measures by the CSRC
[3] Jinling API Data - Market Index and Sector Performance Data