China amends laws to clean up markets

[Ulhas Joglekar]

27 December 1999
China amends laws to clean up markets
BEIJING: China's legislature on Saturday toughened laws to counter insider
trading, market manipulation and other crimes in stock and futures
exchanges.
The legislature's amendments to the Criminal Law made using or leaking
inside information about securities or futures dealings punishable by up to
10 years imprisonment and fines two to five times the amount of any profits
from such crimes, the state-run Xinhua News Agency said.
Spreading false information to "seriously disrupt securities or futures
markets" was also made punishable with imprisonment and fines, according to
amendment adopted at a nine-day meeting that ended Saturday of the
legislature's executive Standing Committee, Xinhua said.
Employees of securities and futures firms also could be jailed or fined for
releasing false information, making fake transaction records or manipulating
market prices for their own gain, Xinhua said.
The toughened law is part of efforts to clean up China's markets and to
attract and protect average investors. China hopes to tap the $725 billion
held in its citizens' savings accounts, and get them to invest in the shares
of state-run companies that badly need funds to modernize and grow.
The markets "can't operate healthily unless these crimes are punished,"
Xinhua quoted Yang Jingyu, a legislative affairs official with China's
cabinet, the State Council, as saying.
"Despite the tightening up of regulations and clearing up of anomalies,
there still exist problems," he said. "These and other negative activities
have damaged the interests of investors and severely disrupted the financial
and economic order."
The meeting of the National People's Congress Standing Committee also
decided to amend China's corporate law to make it easier for high-tech firms
to sell shares on the nation's two stock exchanges and raise funds, Xinhua
said. The State Council will soon publish detailed rules on how these
high-tech firms can list, it added. (AP)
For reprint rights: Times Syndication Service
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Bennett, Coleman & Co. Ltd. 1999.