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China Securities Regulatory Commission announced yesterday to cut red tape by revoking the 32 items of administrative approval on the securities market.
The move falls in line with the efforts of the State Council, the country's highest administrative body, to invalidate the unnecessary government regulations and circulars following China's entry into the World Trade Organization.
The simplification of the administrative procedures creates a more market-oriented environment and minimizes the govern-mental intervention on the market, industrial officials said.
The abolished items included the approval for the establishment of the representative offices of foreign securities companies, the set-up of securities consulting institutions and the appointment of senior executives of domestic brokerage companies.
The abolition comes after a similar action last year by the securities regulator, which lifted restrictions that barred domestic brokers from enlarging their capital bases.
At the same time, lawyers do not need to get the go-ahead from the securities regulator for providing securities-related legal services like before, the securities watchdog said.
However, the securities regulatory body did not relax its control on accounting firms, which still have to get the regulatory approval for auditing the books of listed companies.
Analysts said part of the reason lies in the fact that the fallouts of a raft of earnings scandals on the U.S. equities market have undermined investors' confidence on a global basis.
Although both regulators and the accounting industry have started efforts to put the market on the right course, it would still take time to restore confidence and trust in worldwide markets, Mike Rake, KPMG's international chairman, said.
"China can learn a lesson from the scandals and establish a corporate governance framework for public companies," he added.
The securities regulatory body also said it was mulling over abolishing the second batch of gratuitous rules, but did not specify.
(Shanghai Daily December 26, 2002)
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