Law to ensure safer securities market ahead
Long-awaited Securities Law amendments, which focus on strengthening the supervision of listed companies and securities firms, came under the review of top legislators in Beijing yesterday.
The draft amendment of the law, which was put into practice on July 1, 1999, is expected to better protect the interests of investors, especially small and medium-sized ones, said Zhou Zhengqing, vice-chairman of the Financial and Economic Committee of the National People's Congress (NPC).
Zhou made the remarks when explaining the amendments to the NPC Standing Committee.
The legislators are attending the four-day 15th session of the 10th NPC Standing Committee, which concludes on Wednesday.
They also started to examine a draft interpretation of Hong Kong's mini-constitution, deliberated over the Law on Civil Servants for the second time, and heard reports from vice-ministers of foreign affairs on certain international conventions and treaties that China is expected to sign.
The draft has 229 articles, among which 29 are newly added and 95 are revised. Fourteen articles from the old law have been scrapped.
The former Securities Law could not meet the demands of the present situation, especially in such sectors as stocks trade and securities supervision, according to Zhou.
The draft amendment, which took nearly two years to complete, comes at a time when the country's stock market has been wallowing in the doldrums for some time.
The benchmark Shanghai composite index hit a fresh six-year closing low on Friday, finishing at 1,169.19 points.
Some listed companies have problems such as a poor governance structure and bad information-release system, said Zhou, adding senior officials at a number of listed firms have a bad reputation.
"Some securities companies do not have a strict internal supervision system and have irregularities in their business activities," Zhou said.
He added the current Securities Law failed to establish a sound mechanism for protecting the interests of investors.
"Solutions to all these problems will be found in the amended Securities Law, which will have a positive influence on the stock market," said an NPC official involved in drafting the amendment who declined to be named.
(China Daily 04/25/2005 page1)