The Shanghai Stock Exchange issued on Saturday China’s first ever rules for supervision of retail stock investors, saying those who violate laws would face criminal charges, in a move touching a fundamental problem of more speculation than investment in China’s stock market.
PDF
1 comment:
Shanghai Bourse to Supervise Retail Investors
Reuters
27 September 2008
SHANGHAI, Sept 27 - The Shanghai Stock Exchange issued on Saturday China’s first ever rules for supervision of retail stock investors, saying those who violate laws would face criminal charges, in a move touching a fundamental problem of more speculation than investment in China’s stock market.
The rules, with an immediate effect, demand individuals get familiar with the asset quality of brokerages who trade stocks on their behalf and sign related risk-bearing agreements.
Retail investors must also cooperate with brokerages requesting personal information related to their ability to control risk, including their investment experience, and accept decisions brokers make to manage them in different rating categories, according to the exchange’s website .
Those investors who want to invest in highly risky products must go through relevant training, pass related examinations and win the “Qualified Individual Investor Certificate,” the exchange said, without giving details.
“Investors must not do inside trading, rig prices or conduct other acts that violate laws and regulations,” it said.
“Those who are found of abnormal trading activities will be subject to trading restrictions and special supervision.
“If their trading and related activities are suspected of violating laws, our exchange will ask relevant departments to investigate and to launch administrative and criminal charges against them,” it said.
An exchange spokesman was quoted as saying retail investors, who owned 51 percent of China’s tradable shares at the end of 2007, were still inmature and focused on trading of loss-makers, small caps and stocks with high valuations.
“How to take effective steps to foster mature and rational investors is a long-term, uphill task in our country’s capital markets’ construction,” the unnamed spokesman said in remarks quoted by state media on Saturday.
Analysts have said a quick-profit psychology dominating among retail investors is one of the crucial reasons for volatility of fund flows in China’s relatively young stock market.
Between the start of 2006 and October last year, the benchmark Shanghai Composite Index <.SSEC> rose five-fold. It has since dropped 63 percent.
Post a Comment