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Market Watchdog Must Keep Eyes Open
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China Securities Regulatory Commission (CSRC), the country's stock market watchdog, should stay on high alert about irregularities in the red-hot stock market and deal heavy blows to violators.


This is even more crucial as the number of stock market accounts with the Shanghai and Shenzhen bourses fast approaches 100 million.


A healthy market is important to ensure an open and fair playing field for all investors, especially small ones who bet their homes and pensions on the market.


According to reports, about 65-70 percent of A shares are owned by small investors, including millions who plunged into the market during its recent run.


For years, insider trading and improper information disclosure have haunted the nation's fledging stock markets.


Institutional investors, with ties to listed companies, stock brokers and government departments, have long enjoyed the privileges of information, while medium and small investors are left blindly following market rumors.


Small investors gathered in the evening outside stock brokerage firms to get the so-called "inside" information has become a daily scene. Others pay to share "inside" information offered by bloggers.


A punishment recently levied by the CSRC is a sign of stricter market supervision.


Tang Jian, a fund manager at China International Fund Management Co Ltd, was fired last week after being accused of using undisclosed information to trade stocks with his family's accounts.


Meanwhile, Hangxiao Steel Structure Co Ltd, whose stocks are highly valued in the market, was fined 1.1 million yuan for improper disclosure of information regarding a deal in Angola.


But this penalty, a petty amount compared with the company's financial gain, will not serve as an effective warning to other companies. In fact, it might tempt them to defy laws and regulations designed to deter the temptation of huge profits.


The CSRC has to show more resolve in ensuring fair play in the buoyant market.


(China Daily May 22, 2007)


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