The Legal & Regulatory Framework of Securities Markets in the PRC

Abstract

In its quest for foreign investment, the People's Republic of China (PRC) developed its securities markets in the mid-80s. This paper examines the process by which the PRC developed its securities markets including an analysis of the ideological debates surrounding the opening of the securities markets. The second part of the paper contains the legal and regulatory framework of the securities markets built up by the author from an array of fragmented legislation passed by the Chinese authorities in a span of 15 years. The paper looks at the regulation of the principal players such as dealers and brokers, insider dealing and the rules governing listing and flotation of Chinese companies on the Shenzhen and Shanghai Stock Exchange. It ends with a critical analysis of the problems facing the Chinese securities markets today.

JEL Classification: K2, K22