Long-awaited Securities Law amendments, which focus on
strengthening the supervision of listed companies and securities
firms, came under the review of the Standing Committee of the 10th
National
People's Congress, China's top legislators, on Sunday.
The Standing Committee is holding its four-day-long 15th
session, which will conclude on Wednesday.
The draft amendment of the 1999 law is expected to protect the
interests of investors, especially small and medium-sized ones,
said Zhou Zhengqing, vice chairman of the Financial and Economic
Committee of the National People's Congress (NPC).
The draft, which took nearly two years to complete, has 229
articles, 29 of which are newly added and 95 are revised. Fourteen
articles from the old law have been scrapped.
The existing Securities Law does not meet today's needs,
especially in such sectors as stock trading and securities
supervision, according to Zhou. He added that it failed to
establish a sound mechanism for protecting the interests of
investors.
The draft amendment comes under review as the country's stock
market has been wallowing in the doldrums for some time. The
benchmark Shanghai composite index hit a fresh six-year closing low
on Friday, finishing at 1,169.19 points.
Some listed companies have problems such as poor governance and
disclosure systems, said Zhou, calling attention to the poor
reputations of senior officials at a number of listed firms.
"Some securities companies do not have a strict internal
supervision system and have irregularities in their business
activities," he added.
"Solutions to all these problems will be found in the amended
Securities Law, which will have a positive influence on the stock
market," said an NPC official involved in drafting the amendment
who declined to be named.
(China Daily April 25, 2005)