Opinion | China's new securities regulator must continue on path of market reform

With his departure as chairman of the China Securities Regulatory Commission, Guo Shuqing became the agency's most short-lived chief. We don't know how he felt, but the stock market swing on March 18, the day Xiao Gang took office, suggested that investors were not yet sure what to expect of Guo's successor.

Guo's departure after 17 months in office is not good news for a securities market in need of overhaul. The various schemes he launched were aimed at long-term market reform, and their effects can only be felt after a few years of implementation. To be sure, the deregulation of the stock market and funds must continue, to prevent a return of the old ills; efforts to securitise bonds and assets will come to a dead end if they are put on hold now; and the "zero tolerance" audit policy, especially, must be fully backed, for there can be no U-turn.

Continuity in the regulatory framework is a priority. That does not mean Xiao must only follow in Guo's footsteps, but the new chief has the responsibility to deepen market reforms.

So what kind of securities regulator does China really need?

Of the reforms introduced over the past year, the most challenging is to revamp the framework that regulates the issuance and delisting of stocks. During his tenure, Guo did not fully resolve the problems with the application and vetting of a listing, but the direction of change is clear. The commission has set out to make delisting simpler and quicker, raise the standards for the reorganisation of corporate assets, enhance the transparency of the vetting process and crack down on financial fraud.

We also recall Guo's words when he first took office, "Could we stop vetting IPO applications?" The question reflected the open mind of a progressive regulator.