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of
(ii) The securities system
The draft "Securities Law" is now in the final
and
is
expected
to
49.
stage
be enacted in preparation
1994.
The exact timing will depend on the progress in drafting the related "Companies Law". Once the "Securities Law" is passed, it will override the "Interim Regulations on the Administration of the Issue and Trading of Shares"
promulgated in May this year.
50.
According to the draft legislation, the annual quota of new shares to be listed on the stock exchanges will be removed, thereby making way for a greater number of listing. The stock exchanges will be subject to better
management. publicly-held shares will be treated on equal footing.
will also be better
State-held shares, legal
Over-the-counter
stock markets
person shares and
instituted to supplement the two main stock exchanges so as to meet the substantial potential demand of investors.
51.
As regards the bond
to put
efforts more
in
market, the government is
several areas.
mainly
First,
of
going currently China's government bonds consist medium-term bonds with maturities ranging from three to Efforts will be made to increase the range of particularly towards shorter maturities.
five
years.
maturities,
bonds at
Secondly, the interest rates carried on the government present vary between individual and institutional investors, in favour of the former. This is not desirable for the creation of an integrated government bond market and will be redressed. Thirdly, compulsory sales of
bonds will government
Fourthly, be gradually phased out. financial institutions are currently not allowed to hold large volumes of government bonds. This restriction will be relaxed SO that these institutions can adjust their
bond holdings according
volumes
of
government
capital liquidity ratio requirements.
to
the
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