The Regulation of Securities Offerings in China: Reconsidering the Merit Review Element in Light of the Global Financial Crisis

Hong Kong Law Journal, Vol. 41, No. 10, 2011

33 Pages Posted: 14 Apr 2011

See all articles by (Robin) Hui Huang

(Robin) Hui Huang

Chinese University of Hong Kong - Faculty of Law; 华东政法大学(East China University of Political Sicence and Law); University of New South Wales - Faculty of Law

Date Written: April, 11 2011

Abstract

The aim of this paper is to critically examine China’s regulation for securities offerings in light of the recent financial global crisis and, based on these findings, make policy recommendations for future reform. The Chinese regulatory regime contains the key element of merits review, apart from disclosure requirements akin to those found in many other jurisdictions. This paper shows that China’s merits-based regulation suffers from a number of serious problems affecting the efficacy of the securities market. But the author argues against the idea of an immediate switch for China to the disclosure-based regulation, taking into account the weaknesses of the disclosure-based regulation, as evidenced in the recent global financial crisis, as well as its compatibility with the local conditions in China. It is submitted that while merit regulation may be anachronistic for advanced economies, the same cannot be said of emerging markets like China at least in the short run. Apart from its theoretical value in informing debate on the model of securities regulation, this paper is also of practical significance to foreigners who contract with or invest in Chinese listed companies.

Keywords: Merits review, Securities offerings, China, Global financial crisis, Comparative study

JEL Classification: K22, G15

Suggested Citation

Huang, (Robin) Hui, The Regulation of Securities Offerings in China: Reconsidering the Merit Review Element in Light of the Global Financial Crisis (April, 11 2011). Hong Kong Law Journal, Vol. 41, No. 10, 2011, Available at SSRN: https://ssrn.com/abstract=1806938

(Robin) Hui Huang (Contact Author)

Chinese University of Hong Kong - Faculty of Law ( email )

Shatin, New Territories
Hong Kong
852-39431805 (Phone)
852-29942505 (Fax)

HOME PAGE: http://www.law.cuhk.edu.hk/people/huang-hui-robin.php

华东政法大学(East China University of Political Sicence and Law) ( email )

1575 Wanhangdu Rd.
Changning, Shanghai 200042
China

University of New South Wales - Faculty of Law ( email )

Sydney, New South Wales 2052
Australia
61-2-9385 9649 (Phone)
61-2-9385 1175 (Fax)

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