BEIJING, Nov. 19 (Xinhua) -- Reform of China's capital market has to be market oriented, law based and global, China's top securities regulator said Tuesday at an economic forum.
Xiao Gang, chairman of the China Securities Regulatory Commission (CSRC), said at the Caijing Annual Conference that capital market reform must first be market oriented, as administration had played a dominant role in the past. Under the current system, too many items go through formalities of registration or administrative approval, holding back efficient competition.
The capital pricing mechanism also needs improvement and a codified mechanism for delisting has to be realized. "The only way to solve current problems on the market is to push forward market-oriented reform in a proactive yet steady manner," the CSRC chairman said, adding that the reform plan should avoid causing volatility.
A switch from stock issue based on administrative approval to issue based on registration is a key area and will be "firmly carried out."
Xiao also expected reform of the legal system, especially concerning civil compensation, will help capital market reform. "A legal system to protect smaller investors should be established," he said.
The capital market also has to open up to the outside, Xiao said, but it is premature to develop an "international board," namely a board for foreign companies on China's A-share market.
"The opening up of the capital market is a long and gradual process," Xiao said.
