China’s top securities regulator will crack down on market manipulators

BEIJING – China’s top securities regulator has vowed to crack down “severely” on market manipulators, while saying protecting small investors is a “core priority.”

Ensuring fairness, especially in a market dominated by small investors, is the regulator’s main goal, Wu Qing, chairman of the China Securities Regulatory Commission, said Wednesday at a joint news conference with other top economic and financial planners in the country.

Wu outlined measures considered necessary to improve the quality of listed companies and increase investment returns. These include: encouraging listed companies to make dividend payments more stable, timely and predictable, tightening delisting rules and expanding inspections of listed companies.

He said that openness, honesty and fairness should be the most important principles in the capital market.

“The Chinese market is the second largest in the world, but it is not as strong,” Wu said, adding that recent market volatility has exposed underlying problems.

He said investors need to be better protected so they can have confidence and trust. He also added that this will attract long-term investors.

At the same press conference, Pan Gongsheng, governor of the People’s Bank of China, also pledged to support the listing of high-quality Chinese companies overseas.

Following recent extreme market volatility, Beijing has in recent weeks stepped up measures to support its struggling stock markets.

These include increased regulatory restrictions in the booming quantitative trading industry, restrictions on short selling, a change in the top securities regulator and “national team” stock buying.

The appointment of market veteran Wu as chairman of the China Securities Regulatory Commission in early February preceded a clampdown on quantitative traders.

Wu is known as the “Butcher Broker” for targeting traders in his previous positions as acting vice mayor of China’s major financial center Shanghai and chairman of the Shanghai Stock Exchange.

The Hang Seng Index, Hong Kong’s benchmark stock index of many offshore Chinese stocks, has posted losses for four years in a row, while the CSI300 index of the mainland’s largest blue chips has recorded losses for three years in a row.

While the mainland real estate market was in decline and stock markets were in free fall, desperate mainland investors looked elsewhere for higher returns, despite strict capital controls.

At a parliament meeting last year, Beijing announced an overhaul of financial and technical regulations by creating party commissions to oversee the two sectors as Xi Jinping won an unprecedented third term as president.