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Q&A with OSC Chair Howard Wetston on China's capital markets

By Li Zhenyu (People's Daily Online)

08:57, May 25, 2012

OSC Chair Howard Wetston poses at the IOSCO Annual Conference in Beijing on May 17, 2012. (People's Daily Online/Li Zhenyu)

Howard Wetston, Chair of the Ontario Securities Commission (OSC), was invited as a guest speaker at the 37th International Organization of Securities Commissions (IOSCO) Annual Conference, which was held from May 13 to 17 in the capital city of China.

During the conference, this journalist conducted an exclusive interview with the humorous, gray-haired Wetston.

As head of Canada's biggest securities regulator, Mr. Wetston's main responsibilities are to oversee the administration and enforcement of securities law in Ontario and serve as chair of the OSC’s board of directors.

In this interview with the People's Daily Online, the top Canadian securities regulator talked about his take on the current reform of China's capital markets and his impression of the IOSCO Annual Conference. Here are excerpts from the interview.

Q: What's your impression about this conference in Beijing?

A: I think it's great and well-organized. Everything is arranged in a professional fashion, thanks to the CSRC's efforts. People here are friendly too, and the accommodation and the city tour, everything I saw and experienced is just nice. Beijing has left a memorable impression on me, and I've learned more about China in the last couple of days. I think it's fair to say the conference in Beijing is quite a success.

Q: You said you've learned more about China from the conference. What interests you the most?

A: The conference provided me a chance to share ideas, and learn from and connect with other professionals. I noticed it has brought together quite a number of high-profile Chinese officials and industry experts. This gave me a chance to learn directly from those local insiders about China's capital markets. From what I've learned in the last couple of days, China's capital markets are in a transition phase and developing fast. The nation is becoming more and more open, allowing more international investors to gain access to its vast capital markets.

Q: What's your point of view on the current reform of China's capital markets?

A: From what I've heard in the last couple of days, the CSRC is pushing forward a series of reforms to regulate China's capital markets, and the central bank wants to introduce a series of new financial instruments to better support the real economy. I think it's a positive step forward because, basically from what I've been hearing, there is structural imbalance in China's capital markets and too much reliance on bank loans, and the markets need to be more involved in capital raising. So, from what I understand, I think it's absolutely a positive step.

Q: As you know, China has put off plans to open up its capital markets to international hedge funds. What's your take on that?

A: Well, I think the hedge fund is an important instrument. We have them in Canada, and they are very popular in Europe and the U.S. I think, on balance, the critical issue around hedge funds is managing the risks associated with them. Registration requirements and collecting data on the activities of hedge funds are important for keeping regulators informed about what hedge funds do. So I believe if China has those requirements in place, then I think, on balance, introducing hedge funds could be positive.

Q: Final question. As an industry authority, do you have any suggestions on China's on-going capital markets reform?

A: I can't speak to it very much. The one thing I have learned in the last couple of days is that there is a tremendous effort now in China to help raise capital from the markets rather than simply through the banking sector. And, obviously, that is certainly the case in our markets in Canada, as well as I believe in the U.S. and the Europe. I think it's a positive step forward.

(Read the Chinese version at: 加拿大安大略省证监会主席积极评价中国资本市场改革)

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