East meets West: Securities Law in general and Prospectuses in China and Australia
East meets West: Securities Law in general and Prospectuses in China and Australia
王璟
【摘要】Introduction
In 1998, China passed its first national Securities Law[i] after 10 years of rough and tumbles capital market. In 2001, China eventually entered the World Trade Organisation (WTO) and the China’s securities market has been integrated with the global capital market. With a history of merely 10 years, China’s securities industry is still at the infantile stage. The state, following the lead of other countries, has attempted to protect investors by providing them with more information in the securities market. However, information disclosure is inconsistent with a general condition of less transparency in China. Disclosure regulations in current laws exemplify this problem as well, because while the State once concentrated its efforts on macro-issues or as a market participant, it must now be a market referee. This role is an unfamiliar one for the State since it can no longer rely on its vertical organization to simply direct people’s actions.
Following China’s WTO accession, China will gradually open its financial sector and allow foreign securities institutions to enter into the Chinese market step by step. China has to correspond to this challenge by amending or supplementing new rules in discord with the WTO’rules.
The main point in this article is to exhibit the Chinese securities regulation in relation to disclosure status which has developed rapidly and also there have been many criticism and comments with the development of securities law. The purpose of this article is to compare briefly Australian experience and exiting disclosure regulations with Chinese developing reality.
The article will be divided into four parts. Part I will briefly examine the development of China’s securities industry and its Securities Law. Part II will explain the laws and regulations that require listed companies to disclose information in China. Current regulations are found in the new Securities Law and also in regulations promulgated by China Securities Regulatory Commission. This part will also compare the current regime in Australia. However, this approach may not be effective in the Chinese context. Part III will examine fundraising disclosure liability and remedies under the Chinese securities law, including lack of civil liability with summary of Australian civil liability related to disclosure regime. Finally, the challenge of China’s securities regulations after WTO accession will be addressed and the future approach will be explained as well.
【关键词】Securities Law
【全文】
I. Development of Securities Regulation in China
The Shanghai and Shenzhen exchanges were established in 1990 and 1991 as a means of regularizing stock trading and eliminating the curb markets.[ii] While the central government-through the State Council-permitted the exchanges to be opened, both of the exchanges remained under local control and local rules until in 1992 when a national regulatory framework was established. The rapid development of the market and the resulting speculation and disorder that threatened to cause social instability required a more powerful regulatory body that could administer China’s unified securities markets.[iii] The State Council Securities Regulatory Committee (SSRC) and the China Securities Regulatory Commission (hereinafter CSRC) were established by the State Council in 1992. In 1997, the State Council gave direct control of the Shanghai and Shenzhen markets, which had been under municipal control since their opening, to the CSRC.[iv] Compared to this, the Australian experience is really longer. The Australian stock market is a lot older. The same thing goes for the regulators. As a result, it might be expected that the Australian stock market should be better regulated and that the law that govern disclosure should be more effective. But is that the case?
The 1993 Interim Regulations on the Administration of Issuing and Trading Shares [v](Interim Regulation) and Provisional Measures on Eliminating Securities Fraudulent Activities contained the provisions for the issuing process and instituted disclosure requirements. The Provisional Measures focused on insider trading and market manipulation. But those two measures were inefficient.
