China securities regulator chairman Xiao Gang vows reform
Regulator says it should act as the little finger, staying away from intervention but ensuring transparency and adherence to the rules
The mainland's securities regulator must position itself like a little finger, reducing unnecessary intervention in the capital market while strengthening its role in promoting a transparent and fair market environment through implementing strict rules, China Securities Regulatory Commission chairman Xiao Gang said yesterday.
Xiao told Caijing magazine's annual forum in Beijing that the central government also aimed to push ahead with the globalisation of the capital market, although it was not planning to launch a long-delayed international board in the near term.
Top Communist Party leaders decided at a key meeting this month to deepen reforms in the financial, land, fiscal and capital markets, with steps outlined including an overhaul of the initial public offering system.
Xiao said the CSRC would toughen scrutiny of the "accuracy, comprehensiveness and timeliness" of listing applicants' information disclosure, but would no longer assess valuation or the sustainability of profits.
"Such a reform doesn't mean the CSRC's responsibility will be relaxed," Xiao said. "It's just the way it operates will be changed."
In the capital market, investors were like the thumb, playing the most prominent role, Xiao said, followed by brokerages, the press and listed companies, while the CSRC was like the little finger on the hand.
"The pinkie finger is the smallest among the five," he said. "However, when people fold their palms to make a worship bow, the little finger gets the closest to the Buddha and its power. In the next stage, the CSRC should play such a role in capital market reform, which, while small, possesses the legal power."