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| Overseas Stock Exchanges to Create China Offices |
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China's securities regulator on Sunday issued new regulations, to come into effect on July 1, which will allow overseas stock exchanges to set up offices in the country. The rules do specify that in order to be eligible, the stock exchanges must have a history of over 20 years with impeccable financial records, clearly thus favoring the more established exchanges. Furthermore, their home country will need to have signed a memorandum of understanding on supervision cooperation with the China Securities Regulatory Commission (CSRC) before any office will be allowed. Guidelines concerning the offices' parameters impose strictly non-operating remits on them, allowing them to principally carry out liaison, promotion and research. Any breach of these rules will be punished with a warning, potential confiscation of all illegal earnings, and closure. The offices will operate under the CSRC's supervision, which will be given a 10-day period to sign off on any important promotion operations targeted at local businesses. Should the offices issue severe penalties to any companies listed on their stock exchanges, the CSRC must receive a written report detailing the offence within 10 days. The rules will apply to the stock exchanges in Hong Kong, Macao and Taiwan and the staff must be at least half comprised of Chinese nationals. This news release comes at a time when the US Nasdaq Stock Market Inc is reported to be seeking to set up a representative office in China to obtain more initial public offerings from the rapidly-burgeoning economy. (Xinhua News Agency May 21, 2007) |
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