Yao Gang, Vice Chairman of the China Securities Regulatory Commission (hereafter referred to as the CSRC), indicated on November 2, 2009 to further intensify efforts in investor education and services, advance investor protection mechanism, perfect investor protection means, thus establishing and improving the long-term investor protection mechanism adapting to the China’s capital market development and developing the market in a stable and healthy way.

 

At the International Seminar on “Securities Investor Protection in Financial Crisis”, Yao said that the CSRC has been intensifying its endeavor to construct the fundamental market systems in recent years. In the meantime, it has done a lot, with the supervision over protection of investors’ legitimate rights and interests as the priority, in such respects as cultivating equity culture of the capital market, strengthening the shareholders’ restriction on the listed companies, encouraging more returns to the listed companies’ investors and cracking down on illegal securities activities. The China Securities Investor Protection Fund Corporation (hereafter referred to as the SIPF), under the guidance of the CSRC, innovates on investors protection mechanism, dedicates to constructing a multi-level and full-service system for investors, plays a positive role in building the financial monitoring system for securities companies’ clients, and evaluates the legitimate rights and interests protection for investors of such market participants as the listed companies and securities companies. In addition, it steps up its efforts in international exchanges and cooperation in investor protection. For instance, following the signing of the “Memorandum of Understanding on Securities Investor Protection” with Canadian Investor Protection Fund last year, it also signed the memorandum of understanding on cooperation with Securities Investor Protection Corporation of the U.S. in 2009. All these have yielded a positive effect on the investor protection on China’s capital market.

 

As Yao stressed, China’s capital market is an “Emerging and Transitional" market with imperfect market mechanism, special equity structure, and immature equity culture. As most investors are of small and medium size, many of them are lack of knowledge and experiences in securities investment with weak risk awareness and risk-bearing capacity. Therefore, efforts shall be stepped up in respects of investor education and services and also in investor protection system, to progressively perfect the investor protection means since a stable and sound capital market calls for the coherent long-term investor protection mechanism.

 

The seminar, organized by the SIPF, drew around 80 attendants from domestic and overseas regulators and self-regulatory organizations such as the CSRC system, the Ministry of Finance of the People’s Republic of China and the People's Bank of China.

Source: China Securities Journal