Industrial Production News
- Govt. drafts rules to supervise listed firms
Date: 10-Sep-2007 Sources: (Shenzhen Daily)
THE government has drafted the country's first set of comprehensive rules on supervising listed firms and is seeking public comment as it aims to build a healthier stock market and pave the way for domestic listings of big State enterprises.
The rules, drafted by the China Securities Regulatory Commission (CSRC) and posted on the government Web site, call for closer coordination among government departments including the CSRC and the People's Bank of China, the central bank.
The rules aim to address two burning problems facing China's fledgling stock market: worries over poor corporate governance and insufficient cooperation among government bodies with jurisdiction over the financial markets.
Large Hong Kong-listed firms such as China Life and China Construction Bank have been listing their shares domestically with the government's encouragement, after a key reform allowing previously non-traded government share holdings to be freely traded within a few years.
'The rules aim to encourage listed companies to improve their qualities as they expand, through effective market supervision,'said a statement by the legal office of the State Council, the Cabinet, which overseas major regulatory changes.
'They are also propelled by the demands of the opening of capital markets and the need to make China's markets meet international norms,'it said.
The supervision of listed companies is currently governed by several fragmented sets of regulations on specific matters such as governance and conducting shareholder meetings.
The new rules would order State-run parent companies to make their listed arms independent in terms of assets, finance, management and business, while banning parent firms from infringing on the interests of public investors.
Listed companies would also be banned from corporate activities such as mergers and acquisitions that damage the interests of the State and public shareholders.
Foreign investors engaging in such activities must abide by China's laws and regulations, the draft rules said.
The CSRC will be empowered with the main tasks of corporate supervision, including probing possible irregularities by interviewing company officials and conducting spot investigations.
The public will have until Sept. 24 to comment on the new rules, the statement said.
It gave no date when the rules would be officially issued and implemented, but China's securities rules are typically promulgated within two weeks after the end of the consultation period.
The government has been stepping up efforts to supervise the stock market amid strong performance of stocks listed on the mainland's two stock exchanges. The benchmark Shanghai Composite Index more than doubled in value so far this year.
The CSRC said late Wednesday that it will further crack down on insider trading and price manipulation to ensure the healthy development of the country's capital market.
Sponsor Results:
