China draft regulations target futures market fraud

Guo Shuqing, chairman of China's Securities Regulatory Commission

China’s securities regulator issued draft regulations on Friday that aim to crack down on deceptive practices in the country’s securities futures markets through increased supervision and “name and shame”-style disclosure of chronic offenders, official media reported on Friday.

The draft rules, released for public comment late on Friday afternoon, would increase regulatory supervision of investors, underwriters, accountants, lawyers, and other market participants with an established record of dishonest practices, the official Xinhua news agency reported.

The measures would establish a public database of such individuals and firms and the practices they have engaged in, Xinhua said.

The regulations are the latest in a series of moves this year by the China Securities Regulatory Commission (CSRC) to clean up the country’s chaotic securities markets, which analysts say are rife with insider trading, faulty disclosure, and other forms of manipulation.

A related measure would establish a system for monitoring and public disclosure of instances in which listed companies fail to carry out promises they have made regarding such actions as dividend payments and asset restructurings.

The rules also specify a zero tolerance policy for dishonest practices under which an individual who has engaged in such practices one time would be ineligible for selection to CSRC’s audit committee.

CSRC intends to issue a final version of the rules later this year, the news agency said.

CSRC has issued a flurry of new measures to clean up and develop the country’s financial markets since Chairman Guo Shuqing took office in October last year.

The measures include plans to roll out a high-yield bond market; the establishment of an “investor protection” bureau within CSRC; efforts to crack down on IPO pricing abuse and insider trading; and plans to streamline rules for exchange de-listings.

Gabriel Wildau

Categories: Finance & Economy

Tags: , , , , ,

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