China mulls draft law to ease regulation on securities

BEIJING - Administrative examinations and approvals in stock issuance may be abolished, according to a draft amendment read by the top legislature Monday.

The draft amendment to the Securities Law was read by the Standing Committee of the National People's Congress (NPC) for the first time during its ongoing bimonthly session, which began on Monday and will run until Friday.

The draft amendment outlined a stock issuance registration system that would replace the current examination and approval system. This would mean the stock issuance examination committee under the Securities Regulatory Commission will dissolved.

The registration system would strengthen the market's decisive role in distributing resources, said Wu Xiaoling, deputy head of the NPC Financial and Economic Affairs Committee.

The draft amendment called for establishing a multi-level capital market, stipulating information disclosure obligations, promoting innovation in the securities sector, and better protecting investor's interests.

The draft amendment canceled several administrative examination and approval procedures, abolished certain "restrictive" regulations. Instead, it called for stricter supervision and law enforcement.

The draft increased the range of securities that would be regulated by the law, from stocks and corporate bonds at present to stocks, bonds, depository receipts and other securities identified by the State Council.

Issuances and trading of assets backed securities, listings and trading of government bonds, securities investment funds were also covered in the draft amendment.