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)
