Market supervision system still inadequate: experts
The China Securities Regulatory Commission (CSRC) reportedly conducted a personnel reshuffle over the weekend amid the ongoing crackdown on improper activities in the stock market, such as malicious short selling.
Li Chao, former deputy administrator of the State Administration for Foreign Exchange, will succeed Zhuang Xinyi as vice chairman of the CSRC, and will be in charge of areas including intermediary and investment fund supervision and private equity funds supervision, news portal caixin.com reported Sunday.
Also, Fang Xinghai, the former head of the international economic bureau at the Central Leading Group on Financial and Economic Affairs, will succeed Liu Xinhua as vice chairman of the CSRC, and will be responsible for the international cooperation and accounting departments, according to caixin.com.
"Some of the supervision experience and regulatory philosophy the two new leaders gained in their previous jobs will be useful in their new jobs," Zhao Xijun, deputy director of the Finance and Securities Institute at the Renmin University of China, told the Global Times on Sunday.
Li and Fang's accession came after the launch of an investigation into Zhang Yujun, former CSRC vice chairman, for "severe violations of discipline," according to a statement posted on the website of the Central Commission for Discipline Inspection (CCDI) on September 16.
China's securities regulator has taken action against illegal and irregular activities in the past few months.
The CSRC has recently issued fines and seized assets worth a total of more than 2 billion yuan ($315 million) in 12 securities market manipulations cases, CSRC spokesman Deng Ge said at a press conference Friday.
Deng said the CSRC will continue to crack down on irregularities and illegal activities in the market by jointly implementing cases with a special law enforcement campaign that was launched on April 24. The regulator has investigated 106 cases since then, according to Deng.
The CSRC has fined offenders nearly 5 billion yuan since September, the 21st Century Business Herald on Saturday.
"The CSRC should further increase the severity of the penalties to strengthen the deterrent against irregular activities," Qiu Yanying, chief analyst at Shanghai VStone Capital Co, a private asset manager, told the Global Times on Sunday.
With the approval of the central government, CCDI will send inspection teams to carry out special inspections on 31 enterprises and institutions, 21 of which are financial institutions, including the China Banking Regulatory Commission, the big four State-owned banks and the two main stock exchanges, according to a statement posted on the CCDI website on Friday.
Besides the CSRC and CCDI, public security agencies have also carried out investigations into insider trading.
CITIC Securities Co, China's biggest brokerage by total assets in 2014, has announced that the authorities have taken 11 of its employees in for investigation, the Beijing News reported on September 16.
Qi Shuguang, the general manager of a CITIC Securities subsidiary who was responsible for its direct investment business, has also been detained, caixin.com reported on Friday.
The same day, Shenzhen-based Guosen Securities Co announced the death of Chen Hongqiao, the company's president, with media reports claiming he had committed suicide.
There has been widespread media speculation that Chen's death was related to the company's short-selling activities.
The analyst Qiu noted that the public security investigations can serve as a deterrent against future securities crimes, "but a more normalized supervision mechanism is more important."
Zhao noted that there is still inadequate supervision in China's immature securities market. "The market regulator should build a just, fair and open market atmosphere," Zhao said.
China's A-share markets continued to fluctuate wildly last week with 800 stocks falling by the daily trading limit of 10 percent on Wednesday. But on Friday the mainland markets still saw turnover of more than 1 trillion yuan, with the Shanghai Composite Index rising 1.3 percent to 3,412.43 points.
The People's Bank of China (PBC), the central bank, announced Friday that it will cut the benchmark deposit and lending rates by 25 basis points, lowering the one-year lending rate to 4.35 percent and the one-year deposit rate to 1.5 percent.
The PBC also reduced banks' reserve requirement ratio from 17.5 percent to 17 percent, with an additional targeted cut of 50 basis points for qualified banks to encourage loans to agriculture and small and medium-sized enterprises.
