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| Non-listed Companies to Be Regulated |
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The proposed division, to be set up under the China Securities Regulatory Commission (CSRC), will be responsible for reviewing and supervising non-listed public companies' stock issuance under the new securities law. CSRC currently has one public offering supervision division, which oversees and supervises listed companies and their offerings. "The establishment of the proposed second public offering division is in line with the revised Securities Law, which stipulates that any public stock offering shall be reviewed by CSRC," a CSRC official said yesterday. Under the revised law, which took effect in January, companies that have issued stocks to more than 200 shareholders will be counted as public offerings and they will be put under the CSRC's proposed new supervision department. It is estimated that there are more than 10,000 such non-listed public companies. Some view the law revision as a method of expanding CSRC's regulatory responsibilities and increasing its power. In accordance with changes brought about by the revised law the CSRC is now actively pushing to establish a second public offering supervision department, CSRC Chairman Shang Fulin was quoted as saying by China Securities Journal. The chairman did not give details of when the new division would commence. Securities Times, a business newspaper, yesterday reported that the new department would be set up in the first half of this year but did not identify its sources. Feng Henian, the current deputy director of CSRC's legal affairs division, who is rumored to be a candidate to lead the new division, declined to comment yesterday. Experts say the proposed new public offering supervision division and the idea that all non-listed companies' public stock offerings will be put under scrutiny are a welcome move. "In the past these non-listed companies' stock offerings were under several regulators' scrutiny and overlapping always resulted in confusion," said Li Wei, chief economist with China Beijing Equity Exchange, where companies, usually with less than 200 shareholders, trade their stocks and equities. "Under such circumstances it is not surprising that sometimes the non-listed public companies' stock issues were plagued by irregularities," said the economist. "By putting them under one supervisory framework it'll certainly contribute to the healthy and orderly development of a multi-tier capital market," she said, noting that it would spur the growth of other equity exchange activities such as the over-the-counter (OTC) stock trading system. A multi-layer capital market will include the main board, small and medium-sized enterprises exchange, an OTC stock trading system and equity exchange, Shang said at a work conference earlier this year. ( |
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