Steps Needed to Clean Stock MarketThe domestic stock market has slid for three consecutive days since it reopened on Monday after the Spring Festival holiday.One of the causes is talk that the China Securities Regulatory Commission (CSRC) will appoint Hong Lei, a former fund manager, as vice-director of its funds supervision department, which many stock players guessed. Hong is known for providing information to the monthly Caijing Magazine last year for its article "Funds Behind the Black Curtain," which exposed illegal deals in the industry, such as fund managers manipulating the stock market. The article stirred up an earthquake in the industry, while Hong was viewed as a traitor by his fellows. Now those fund managers may tremble at the thought that they could be watched even more by the new watchdog. The appointment of Hong, however, is viewed by many insiders as the thin end of the wedge. Since late last year, CSRC has issued a series of new regulations and CSRC officials have repeatedly vowed to crack down on irregularities while increasing the transparency of the market. And the commission is planning to stage more radical reforms this year to clean up the industry. For numerous small investors, who used to be victims of irregularities, stricter regulatory measures will help rebuild their confidence in the market. But bad news about the stock market has made some people doubt the reforms. Recently, Zhengzhou Baiwen, a bankrupt public company that provided false data about its business to the shareholders, was saved from being removed from the stock market through local-government-supported restructuring. The firm's reorganization report has been criticized by the public for its ambiguous and puzzling data. Despite the public sentiment to kick unqualified Zhengzhou Baiwen out of the market as an example, the firm still lives on. Maybe it would be hard for CSRC to dump a company shielded by local authorities. But the commission will hardly make its promises believable if violators are not punished. Obviously, more strenuous efforts are needed to build a completely fair, impartial and transparent securities market. Source: China Daily |
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