Question

Why is the establishment of the China Securities and Regulatory Commission (CSRC) considered a milestone event for the development of Chinese stock market?

Answer 1

Answer-

The establishment of China Securities and Regulatory Commission (CSRC) is a landmark in the development of Chinese stock market.

The China Securities Regulatory Commission (CSRC) was established to stabilize and manage the stock market. The various measures were taken up and series of chronological events are listed below which reformed the Chinese stock market and opened up for international investors.

In between 1997–2005, the legal structure of the market was established and the delisting system was launched.

The introduction of QFII scheme (Qualified Foreign Institutional Investors ) in 2003 allowed the foreign investors to invest in domestic securities.

The reform of the split-share structure was incepted in 2005.

By the end of the year 2007, A-shares were no longer allowed to divide or split into tradable and non-tradable shares.

The transition stage from the year 2008 to 2010, took the Chinese stock market into a stage of deepening reform and opening-up further for foreign investors.

The Initial Public Offer reform which started in August 2010 was intended to allow the market to play a prominent role in IPOs.

The chinese government has aggresively launched a series of opening-up policies to connect the Chinese stock market to international capital markets since 2012.