Tackling stock market irregularities

This is a formidable challenge, given the constraints to which the agency is subject. Coincidentally, Xiao contributed a signed article to the authoritative Qiushi Journal just a week before the Everbright affair in which he outlined some of the specific constraints that have frustrated the enforcement efforts of the agency.

Not only does the agency lack the necessary power to do its job properly, it seems to be desperately short of funds that would enable it to acquire the technology able to detect and analyze irregular market activities, and to recruit enough qualified professional investigators to gather the evidence, track down the culprits and prepare legal cases leading to conviction. It is has not been uncommon for the powerful interests involved in irregular stock market activities to block the commission's investigations.

When Xiao made it known earlier this week that the commission plans to double its investigative team by adding 600 professionals, the move was hailed by some analysts and commentators as a brave first step in strengthening the agency's enforcement efforts. But there are others who remain skeptical that manpower alone will be enough to eradicate irregularities, citing the same reasons that Xiao mentioned in his article.

The obvious next step is to empower the regulatory commission with the legal authority to subpoena, search and detain. What's more, proper procedures have to be established to enable the commission's investigators to call on the assistance of the police in case of resistance to cooperate with their investigations, a not uncommon occurrence, according to Xiao.

Of course, there will need to be further steps that may involve reform of the underlying policy and approach. But let's take it one step at a time.