BEIJING - To give investors
better protection and enrich their investment tools,
China's top securities regulatory commission said
yesterday a batch of new products and regulations will
be introduced into the capital market in the near term.
The pace of financial innovation has accelerated
recently. And interaction between the insurance, banking
and securities sectors has increased, said Shang Fulin,
chairman of the China Securities Regulatory Commission
(CSRC), at a financial conference here on Wednesday
organized by Euromoney.
He said relevant
departments are working together on the promotion of
more new fixed-income investment products.
Some
asset securitization projects are expected to be
introduced after final adjustments and regulator's
approval.
"The condition for promoting asset
securitization is ripe," Shang said.
In April,
China Cinda Asset Management won the approval for a
pioneering securitization project, which, in joint
efforts with Deutsche Bank, involved 2 billion yuan
(US$240 million) of Cinda's non-performing assets.
But that was only a trial with the disposal of
non-performing assets. Experts noted that
securitization, a structured finance tool that
repackages the cash flow generated from underlying
assets into tradable securities, should not be limited
to poor assets. Good bank assets, like some medium and
long-term housing loans, should also be allowed to be
securitized, they said.
A number of Chinese
banks, including China Construction Bank, China
Development Bank and Shanghai Pudong Development Bank,
have already applied to securitize part of their assets
and issue relevant securities with the help of some
investment banks.
Banking regulators expressed
support for such innovations earlier this year.
More interaction and better co-ordination
between the banking and securities watchdogs are
expected to hasten the progress, analysts said.
In other areas of innovation, Shang Fulin said
yesterday the commission is ready to introduce a new
voting system for shareholders of listed companies on
major corporate decisions.
According to a
drafted rule, which was published in September for
public consultation, listed companies that plan to issue
new shares, convertible bonds or which have their
subsidiaries listed overseas should have the plans
approved by more than half of the tradable shareholders.
They should also provide shareholders an
Internet platform to attend general shareholder meetings
and online voting abilities.
The arrangement is
aimed to provide better protection of the interest of
minority shareholders. Presently, only one-third of the
shares of Chinese-listed companies are tradable shares
while the rest are non tradable shares that are
controlled by the state or legal persons. The situation
often puts small investors at a disadvantage in
participating in corporate decisions.
"If the
split equity structure is not resolved, we must make
some breakthrough in the systematic arrangement to
better protect investors' interests," said Shang.
(Asia Pulse/XIC)
Dec 3, 2004
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