chapter  5
30 Pages

The role and function of the China Securities Regulatory Commission

Introduction Information disclosure is one of the core regimes in the capital market that needs to be further enhanced. A weak regulatory and supervisory framework for information disclosure may result in a market failure. Scandals such as Enron and the current financial crisis amplify this point. China’s securities market has developed substantially in past decades. An information disclosure regime has been gradually established and continuous regulatory measures are being taken to enhance this system. The China Securities Regulatory Commission (hereafter the CSRC) has been playing an important role in regulation and supervision of China’s developing capital market. However, questions are being raised, among other issues, about whether the CSRC has suitable powers in relation to the supervision and regulation of the information disclosure regime, and about the effectiveness of the supervision and regulation of information disclosure in China. Is the CSRC a weak regulator? With a comparitive study of the function and role of the Financial Services Authority (hereafter FSA)1 and today’s Financial Conduct Authority (hereafter FCA) in the UK and the Securities and Futures Commission of Hong Kong (SFC), this research offers an analysis of the regulatory behaviour of the CSRC regarding the information disclosure regime in China.