China Securities Regulatory Commission (CSRC), the country's
stock market watchdog, should stay on high alert about irregularities in the
red-hot stock market and deal heavy blows to violators.
is even more crucial as the number of stock market accounts with the Shanghai
and Shenzhen bourses fast approaches 100 million.
A healthy market is important to ensure an open and fair playing field for
all investors, especially small ones who bet their homes and pensions on the
According to reports, about 65-70 percent of A shares are owned by small investors, including millions who
plunged into the market during its recent run.
For years, insider trading and improper information disclosure have haunted
the nation's fledging stock markets.
Institutional investors, with ties to listed companies, stock brokers and
government departments, have long enjoyed the privileges of information, while
medium and small investors are left blindly following market rumors.
Small investors gathered in the evening outside stock brokerage firms to get
the so-called "inside" information has become a daily scene. Others pay to share
"inside" information offered by bloggers.
A punishment recently levied by the CSRC is a sign of stricter market
Tang Jian, a fund manager at China International Fund Management Co Ltd, was
fired last week after being accused of using undisclosed information to trade
stocks with his family's accounts.
Meanwhile, Hangxiao Steel Structure Co Ltd, whose stocks are highly valued in
the market, was fined 1.1 million yuan for improper disclosure of information
regarding a deal in Angola.
But this penalty, a petty amount compared with the company's financial gain,
will not serve as an effective warning to other companies. In fact, it might
tempt them to defy laws and regulations designed to deter the temptation of huge
The CSRC has to show more resolve in ensuring fair play in the buoyant
(China Daily 05/22/2007 page13)