The SZSE strives to create a fair, open and orderly market to meet diversified financing needs. The statutory obligations of the SSE include:

Examine listing qualifications
The SZSE is the statutory authority to vet listing qualifications of companies which have been offered to the public, as approved by the CSRC.

Provision of market
SZSE provides the market means of raising capital through equities and debt issues. SZSE gives businesses, big and small, access to a liquid pool of investment capital. Trading information is disseminated to allow real-time access.

Monitoring of trading
A market surveillance team of SZSE with auto-alert and trade analysis functions is put in place to deter market abuse.

SZSE market surveillance team keeps a watch on everyday trading activity in a real-time and post trade manner by using integrated trading and settlement data. The system creates automatic alters to help detect unreasonable trading volume, price volatility and other irregularities, aimed at preventing insider trading and market manipulation. Upon discovery of market abuse, the market surveillance team makes due-diligence inquiries and refers to the CSRC for investigation or discipline action, when deemed necessary.

The following picture shows the main functions of the market surveillance:

The main functions of the market surveillance:

Ensuring continuous listing compliance
The SZSE works to ensure that listed issuers meet continuous listing standards. An issuer shall be suspended from trading or even de-listed if applicable criteria are not met.

The SZSE maintains close monitoring on issuers' compliance of continuous listing standards. In accordance with the Securities Law, a listed company posting negative earnings for three consecutive years shall be suspended from trading, and de-listed if it remains in red at the end of the one-year grace period.

Corporate disclosure is made mandatory on a quarterly basis regarding financial integrity, corporate governance and business developments. Price-sensitive ad hoc information shall be released in timely manner. Currently, listed companies are undergoing split share class reform to float the non-tradable state interests which represents two third of gross market capitalization. This ongoing reform will remove the deep-rooted historical hurdle that stands in the way of healthy corporate governance and create greater shareholder value.

To facilitate corporate governance, the SZSE put on line and made mandatory the use of electronic voting system with respect to significant corporate issues. Corporate proposals with respect to major corporate issues shall not be effective unless approved at the shareholder meeting as a result of simple majority vote by minority shareholders.

Supervision of Exchange members
The SZSE monitors the Exchange members to see that they maintain financial integrity and comply with the Exchange rules.

Securities business is licensed by the China Securities Regulatory Commission. Securities houses are categorized into comprehensive securities houses and broking houses based on their financial strength, among other factors.

The Exchange supervises the members in respect of capital adequacy, financial health and compliance. Apart from regular or random inspections, the member firms are required to submit monthly and ad hoc reports regarding their business and financial performance. To curb insolvency risk, the Exchange uses risk-based ranking system to determine the level of monitoring. Members categorized as High Risk receive closer on-going monitoring.