Market Regulatory Structure

Abstract

Creation of an effective regulatory structure for the securities industry was an afterthought of the experiment with enterprise shareholding structures. As even the most ardent institutional proponent of the experiment, the State Committee for the Reform of the Economic Systems, put it in 1989, ‘The purpose of the share system is the share system and not to issue shares to the public.’ What SCRES meant here was the purpose was to develop a form of ownership structure which might result in enhanced enterprise efficiencies through greater management autonomy, the elusive goal of separation of government and enterprise (zhenggi fenkai). That being the case, the whole affair was simply one of the usual inter-governmental planning and co-ordination, there would be no new industry and no need for a special regulator.