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China's securities watchdog vowed yesterday to formulate more market-driven rules and regulations to further reform and open up the securities and futures markets this year.
China Securities Regulatory Commission (CSRC) Chairperson Shang Fulin told a national work conference, held in Beijing over the weekend, that it will concentrate on fighting irregularities and fraud.
This work will focus on credit construction and internal risk control in brokerages and other securities intermediaries.
Shang, who was appointed commission chairman earlier this month, said a set of rules will soon be published aimed at protecting investors' interests and cracking down on bad practices in the industry.
A batch of new laws are expected to come out this year, including the Securities Investment Fund Law and an amendment to the Company Law and the Securities Law, providing better regulation of the industry.
The commission will also streamline the procedure for administrative reviews on new standards and products and boost the growth of institutional investors and new financial products.
All these will help China's futures and securities markets reach international standards, paving the way for the entry of the first batch of foreign investors to the A-share market this year under the qualified foreign institutional investors (QFII) scheme.
Shang said China will steadily open up its capital market, an emerging market which still has many problems.
In a large-scale market clear-up over the past two years, market risks have been lowered to a certain level and a self-disciplinary scheme has been established. Shang said the clear-up has been basically completed, but risk control and credit construction will remain a fundamental task for the regulators.
By the end of 2002, China had 1,224 domestically listed companies, with a total market capitalization of more than 3.8 trillion yuan (US$457 billion), CSRC statistics indicate. The number of stock account holders in the country also reached 68.8 million.
There were also 126 securities houses, together with 21 fund management companies that managed 71 securities investment funds with assets of 131.9 billion yuan (US$15.9 billion).
The Chinese economy's expected rapid growth in the next few years will generate further financial demand from domestic enterprises and an increasing number of mergers and takeovers will also require better services from the sector, said Shang.
As living standards improve, the demand for diversified investment channels will also grow, providing further opportunities for the securities sector.
(China Daily January 27, 2003)
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