CRI听力: Regulator Vows to Strictly Supervise the New Dasdaq-Styled Market

China will officially launch the Growth Enterprises Market, or GEM, on Friday and the first batch of 28 enterprises will be listed on the Nasdaq-styled market on Oct 30th at the Shenzhen Securities Exchange.

With public concerns about the high risks in investing in the new market, China's top securities regulating body says it will take various measures to supervise trading on the new board.




Yao Gang, vice chairman of China Securities Regulatory Commission, says together with other institutions, the regulating body has already taken measures to ensure a steady development of the GEM, and avoid any market manipulation.(www.hXen.com)

"Considering it's the first batch companies on the GEM, we were once worried that the small number of companies in the market would cause investors to drive up the price irrationally. So we finally decide to launch the companies onto the market, group by group. So there will be more choices for investors and the excessive high prices can be held up. Also a regulator has been set up by the Shenzhen Securities Exchange especially for GEM to follow its track. Whenever some illegal things are found, the regulator can deal with them."

Yao Gang says the number of open accounts has increased dramatically and the figure is now over 9 million. However he suggests investors remain rational when they make their deals.

"I would like to advise those investors that the first launched companies are still young, which has a very short history of their founding. The profit model of those companies, their products and the market all have a long way to go to become mature. Every investor should seriously think over the investment risks."

It is reported that for the first batch of companies, the funds raised at their initial public offering were 1.25 times what they initially planned. Yao Gang says there is a much stricter rule on the use of funds raised from the GEM than those from the main board.

"The funds raised by the GEM companies can only be used in the companies' main businesses. What's more, each company must set up a special account for the funds raised and note down clearly where the fund was used. The securities will supervise these accounts. We also ask the mediators to keep track of how those companies use the funds, and the companies who do not follow the rules will be punished."

Though there are unavoidable risks for investing in the GEM, Yao Gang has shown his confidence in the new board, noting China's rapid economic growth will serve as the cornerstone for the steady growth of the market.