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CSRC moves under State Council wing

IN an apparent move to clarify the status of the China Securities Regulatory Commission (CSRC), the State Council will take the securities watchdog under its jurisdiction.

The decision to move the commission under the State Council was in accordance with CSRC's responsibilities, duties and its future development, the Shanghai Securities News quoted State Council authorities as saying.

The executive agency of the State Council Securities Policies Committee (SCSPC) has carried out the day-to-day operations of the securities market since its establishment in 1992.

The clarification of the CSRC's status comes as perceptions grow that it should be given more teeth to supervise the country's securities market.

This is especially important when the CSRC must, now and then, apply directives cross-department and cross-sector.

That CSRC's status has been an executive body rather than a government administrative agency has restricted its power, according to a mainland analyst.

''While the CSRC has a function to make decisions in the industry, its role is not clear in the government's hierarchy,'' he said.

The CSRC was empowered by the SCSPC to carry out daily operations in the securities sector, but the SCSPC was a nominal body of the State Council, with a mixed composition, he said.

''So, there is a problem of what leadership the CSRC is under,'' he said.

Having the CSRC fall under the State Council's umbrella did not mean an upgrading of the status of the commission, he said.

It was more a move to clarify the status of the CSRC, which had been supervising the securities sector without enjoying proper recognition.

''To a certain extent, the inclusion could give more teeth to the CSRC and strengthen its administrative responsibilities,'' he said.

The analyst said the clarification also could be a step towards shaping the future securities regulatory regime, which had attracted much debate in the draft of the yet-to-be-released China's Securities Law.

''By embracing the CSRC to come under the direct leadership of the State Council, its future administrative directives could be strengthened to apply cross-department and cross-sector,'' he said.

The CSRC was established as the executive agency of the SCSPC, a nominal body set up in 1992 to oversee the country's securities market.

The SCSPC was formed by putting together government agencies then involved in the securities sector - including the State Commission for Restructuring the Economy, the State Planning Commission, State Economic and Trade Commission, the Ministry of Finance, and the People's Bank of China.

Because of this, the primary role of the SCSPC was to co-ordinate the agencies, with the CSRC representing it in the day-to-day operations of the market.

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