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China's Securities Market Begins Five-Faceted Reform
Recently, China's securities market has launched and is prepared to adopt a series of reform measures in order to further standardize and develop the securities market and to adapt itself to the new situation of economic globalization and internationalization of the securities market.
First, reforming the stock-issuing system. Enterprises are free from the restriction of the form of ownership in the issuing and listing of stocks, State-owned enterprises, collective enterprises and Chinese-foreign joint ventures can all apply for the issuance and listing of stocks. China introduces the following method for the issuance of stocks: filing an application by the company, recommending by the main consignee, examining by the stock-issuing examination committee and granting approval by the China Securities Regulatory Commission (CSRC). The price of the stock will be fixed by a different means. On the basis of the original system of online price fixing, online price bidding is introduced.
Second, encouraging online securities commission deals. The CSRC published "Temporary Management Method for Online Securities Commission Deals" and "Approval Procedures for Securities Companies Online Commission Deals" in the first half of this year, thus providing necessary conditions for the standardized development of online commission deals. So far, over 40 securities companies have submitted their applications for online commission deals to the CSRC.
Third, establishing the Growth Enterprise Market (GEM). This will help create a favorable environment for direct finance by hi-tech enterprises and growing medium and small enterprises as well as provide a convenient exit for venture capital. Presently, related preparatory work concerning the formulation of regulations and systematic development is being stepped up.
Fourth, fostering organization investors. China will set up opening funded experimental units and carry out pilot activities of Chinese-foreign joint venture fund management company at opportune time. In addition, the CSRC and the China Insurance Regulatory Commission (CIRC) are jointly applying for approval of the operation of insurance fund by the pilot insurance fund management company so as to let them directly enter the securities market to engage in securities investment activities.
Fifth, supporting the listing of financial enterprises. According to the sources, by the end of July this year, there had been 1025 listed companies in China with 343 billion capital stock. Their total prices in the stock market reached 4357.7 billion yuan and circulating prices, 1413.8 billion yuan. The number of accounts opened by investors hit 52.55 million.
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