 |
Housecleaning in China's Futures Sector Pays off
The housecleaning campaign in China's futures sector since 1993 has achieved remarkable success in rectifying market order and perfecting the regulatory system, China's top securities regulator Zhou Xiaochuan said Friday.
Zhou, chairman of the China Securities Regulatory Commission (CSRC), made the remarks at the launching conference of the China Futures Association (CFA).
According to him, the housecleaning has paved the way for a new stage in the healthy and orderly development of the sector.
The futures came into existence in China in October 1990, when the then Zhengzhou Grain Wholesale Market first introduced futures mechanism in its operation.
An explosive development since then had resulted in a mushrooming of exchanges, brokers and futures products, as well as underground transactions, fraud and amounting risks.
In November 1993, the Chinese State Council ordered a housecleaning of the sector. It further tightened the screws in 1995.
Over the past years, authorities have closed most of the 50 exchanges, leaving only the Shanghai, Zhengzhou and Dalian exchanges today.
Most of the 300 brokers have since been shut down or have gone bankrupt, leaving only about 180 still operating.
Most of the futures products, including foreign currency products and all overseas commodity futures have been stopped.
While cleaning up the market, the authorities stepped up the building of the legislation and regulatory systems.
The State Council and CSRC have since issued regulations concerning futures transactions, exchanges, brokers, qualification of senior managers and professionals, and internal control systems of futures brokers.
China's top legislation body, the National People's Congress also passed an amendment to the criminal law in 1999, making futures fraud a punishable crime under the country's criminal law.
According to chairman Zhou, all these regulations have led to remarkable improvement in the general order of the futures market, checked over speculation and greatly reduced the risk of the
market.
Claiming that the housecleaning campaign has basically fulfilled its goal, Zhou said it is imperative that the regulators achieve a greater development of the futures market in the face of China's impending accession to the WTO and accelerated integration of the global financial markets.
Zhou admitted that the futures market is an important part of the financial market and should be allowed a greater role in China's market economy
He pledged that the regulatory body will further perfect the market rules, strengthening its supervision and law enforcement, protecting the interests of investors and learning from foreign experiences for a stable and healthy development of the futures market in the long term.
In This Section
|