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.
This 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 market.
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 supervision.
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 profits.
The CSRC has to show more resolve in ensuring fair play in the
buoyant market.
(China Daily May 22, 2007)