China's securities watchdog has vowed to improve the transparency of its work and the overall capital market in 2005 to ensure efficiency of reforms and to curb corruption.

Investors are expecting greater public scrutiny at the listing approval committee, more disclosure on the policy-making process of regulators and stronger supervision on the transparency of the operation of the listed firms, top officials of the China Securities Regulatory Commission (CSRC) said last Thursday.

"The year 2005 will be a crucial year for capital market reform and development," said Shang Fulin, chairman of CSRC.

The CSRC will further implement reform plans mapped out by the State Council regarding the capital market in 2004 and steadily open up the market, he said.

Strong protection of the interests of public investors will be a priority for the reforms.

"It needs the delivery of truthful, objective and accurate information to the market and a more developed credit culture," said Shang at a media briefing on Thursday in Beijing.

Tu Guangshao, a CSRC vice-chairman, said that the commission would increase interaction with the media and the public this year, such as offering more detailed introductions to the new policies to investors and taking more interviews from the media.

The stock and futures exchanges and relevant associations should also give more disclosure of their work and listed companies are urged to improve the quality of their information disclosure.

CSRC, the watchdog for one of the world's fastest growing capital markets, has always attracted intense public attention, especially since China joined the World Trade Organization (WTO) at the end of 2001 and gradually opened up its capital market.

But the commission officials have remained very low-profile, though the reforms they design may trigger drastic movements in the bourses.

Last year, the CSRC introduced more than 20 major policies about the stock issue system, trading, supervision on listed firms, disposal of the risky securities houses and financial innovation.

More reforms are expected this year to improve the efficiency of fund-raising activities and the overall capital market and to better protect investors' interests, said Shang.

The transparency enhancement program has already had an effect on the listing approval committee of the CSRC.

The committee, which reviews and approves the listing applications of domestic companies, was reshaped last Thursday in Beijing.

It now has 16 new members made up of lawyers, accountants, fund managers and scholars.

The committee is scheduled to be reshaped at the end of each year, and to be formed by 25 members each time.

Apart from CSRC officials, there are also representatives from other government departments, securities businesses, including among qualified foreign institutional investors, and scholars.

CSRC introduced the present structure of the listing committee at the end of 2003.

Since then, the names of the members that review each stock or bond issue application have been released on CSRC's website each time to ensure transparency.

But some listing applicants try to "communicate" with members outside the office to have their plans approved.

Such activities, however, will be punished severely, a CSRC spokesman said last Thursday.

He said the commission would adopt more market-oriented rules and try its best to reduce the power of administrative approvals.

The listing reviewing system will also be reformed, with greater public scrutiny for the reviewing process.

Public disclosure of corruption is welcome, the spokesman said.

This is to eradicate the root of corruption, he said.

Statistics with CSRC said that the listing committee altogether held 58 meetings to review 177 listing applications in 2004.

Only about 67 percent of the applications were approved last year, much lower than the 78 percent in 2003.

As well as enhancing the fight against corruption, the CSRC has also pledged to create legal access for normal communications between listing committee members and the listing applicants, such as giving the latter more opportunities to introduce their enterprises and respond to problems raised during the reviews.

(China Daily January 4, 2005)