Foreign securities institutions will get equal treatment with their
counterparts in China as the country opens up its stock market.
As
a major step in this regard, the Securities Association of China
(SAC), a non-government watchdog of China's securities industry,
has given the greenlight for foreign securities institutions to
become its members.
Zhuang Xinyi, the newly appointed chairman of SAC, who revealed
this, said in Beijing Wednesday: "The membership would promote
their communication with their Chinese counterparts and facilitate
cooperation."
So
far, the membership is open only to domestic securities houses,
fund management and securities consulting companies.
Foreign institutions are expected to bring more advanced expertise
and management to China's securities industry, said Zhuang.
"Domestic securities firms should consolidate their ties with their
foreign counterparts and learn more."
The would-be foreign members must acquire a licence from the
Chinese Government to do securities business in the country and be
registered in China, he said.
A
number of foreign financial institutions are in talks with domestic
securities and fund management firms concerning the launch of the
first-batch of Sino-foreign securities and fund management
firms.
The SAC is opening its door to foreign securities firms at a time
in which it is assuming more regulatory roles in the stock
market.
Top of its agenda is a plan to build up a database of information
on employees of the securities institutions and their business
records.
The database will record the misconduct of individuals and
companies, which can be made public if necessary.
This will help build the creditability of the securities
institutions, and serve as a warning to rule-breakers who used to
get away with no punishment in the past because investigations of
irregularities were often time consuming as a result of a lack of
evidence.
To
cite some of its other new tasks, the SAC is going to assess and
grant qualifications to people working in the securities sectors,
set up professional and ethical standards and organize training
programs.
Such functions used to be shouldered by the government, said Zhou
Xiaochuan, chairman of the China
Securities Regulatory Commission (CSRC).
"But they should be transferred to SAC in the market-oriented
reforms," he said.
He
said recently that great changes would take place concerning the
transfer of functions of CSRC. The commission's information center
has already been transferred to SAC.
Zhuang pledged to improve services of his association, especially
in setting up new industrial ethical and self-discipline rules.
He
also said domestic securities companies should set up a foothold
outside the country to join the competition in the foreign market.
But they need to first improve management and standards and pace up
innovation, he said.
Optimism that a more open stock market in China and subsequent
investment opportunities will emerge was expressed by David Lin,
chief representative in Shanghai of the Taiwan International
Securities Corporation. He hoped that Taiwan securities companies
would be allowed to do business on the mainland.
(China
Daily July 4, 2002)