Chinese lawmakers called for better protection for retail investors in the stock market while discussing an amendment to the Securities Law on Wednesday.
The Standing Committee of the National People's Congress (NPC) is weighing a revision requiring a more transparent information disclosure system.
According to the draft, tabled for its first reading, issuers must disclose information to all investors at the same time and are strictly forbidden from leaking information to any organization or individual in advance.
The majority of investors in China's stock market are individuals, many of whom are taking a gamble on fluctuations of share prices rather than making long-term investments, said He Yicheng, an NPC Standing Committee member.
Preventing securities dealers from manipulating the stock market is crucial, He said, and new provisions in the amendment will protect their interests.
Another change is abolishing much of the red-tape surrounding stock issues. A stock issue registration system would replace the current system and the examination committee of the Securities Regulatory Commission would be dissolved.
Registration will increase the market's role in pricing, said Wu Xiaoling, deputy head of the NPC Financial and Economic Affairs Committee.
The draft amendment establishes a multi-level capital market, promotes innovation in securities, and better protects investors. It increases the range of securities regulated by law, from stocks and corporate bonds at present to stocks, bonds, depository receipts and other securities identified by the State Council.
Issue and trade of asset backed securities, listing and trading of government bonds, and securities investment funds were also covered in the amendment.
