At the "International Symposium on Developing and Improving Investors Protection System on China's Securities Market", President Zhang Yujun of the Shanghai Stock Exchange (SSE) proposed that the cultivation of eligible investors be accelerated to deal with individual investors' excessive speculation and trading.
According to Zhang, a deep analysis on individual investors' structure and current behavior on the Shanghai securities market from January 2005 to May 2008 shows that China's individual investors are short of maturity, rationality and risk awareness on the whole, especially lacking investment ABCs and psychological preparations.
Regarding the problems in developing individual investors, Zhang proposed to speed up the cultivation of eligible investors by the following "Four Measures".
Firstly, make innovation in the investor education. With the aim of breeding rational, mature and eligible investors, the SSE should, by using new forms and channels, carry out the investor classification education based on investors' education demands and their rights to know.
The special establishment of the SSE Investor Education Department at the beginning of 2008 has bolstered the liaison system of member units' investor education for promoting effective investor education. On the other hand, the Department has directly carried out knowledge popularization, education training and qualification accreditation through the online investor education platform. Meanwhile, the Department has boosted communication and cooperation with other market participants and media to establish a mechanism to share educational information.
Secondly, provide services for investors based on their demands. In line with the concepts of "SSE's Core Value Depends on Its Service" and "Market in Mind, Wholehearted Service", the SSE will provide various services according to the investors' demands, and adopt the following measures to implement the "SSE Service Outline": the first is to guide member units to optimize customer management system for individualized and classified investor services; the second is to track and analyze investors' status and behavior, work out a behavior guide for individual investors and improve its service quality; the third is to better online information services; the fourth is to optimize the "Public Consultation Service Hotline" and do a good job in reception of letter visits and on-the-site visits.
In addition, the SSE, by introducing a system of service quality standard, will take the investors' satisfaction as a significant indicator of service quality standard. Meanwhile, the SSE will establish an investor service group to implement systems including the "group responsibility system", the system of service quality evaluation and the system of regular meetings concerning investor services, conduct regular surveys on the "Service Satisfaction" among investors.
Thirdly, transform thoughts to reinforce supervision over the investors. Classified supervision should be conducted according to securities products' classification as well as investors' assets, expertise and their participation in the industry. As a self-regulatory organization, the SSE will perform front-line supervision over the investors according to law, and introduce the investor entry system by taking China's situation into consideration and making accurate analysis on the investors' characteristics.
At the same time, the SSE should continue to strengthen supervision over the investors' trading and intensify all penalty mechanisms. Apart from the existing means such as account surveillance and restriction, the "blacklist" system is also to be introduced. As for the investors on the "blacklist" for their violations of laws and regulations, the SSE will freeze their accounts or restrict their trading, and take the "blacklist" as one of the restriction indicators for investors' qualification accreditation as well. Besides, a market entry-bar system will be set up, under which the investors will be prohibited from re-entry for their serious lawbreaking.
Fourthly, to prioritize systems for the investors' protection, i.e., the investors' rights and interests should be realized and protected via systematical and standardized process. On the one hand, the SSE, by implementing the guideline that "there are laws to abide by, the laws must be observed and strictly enforced, and law-breakers must be prosecuted", will perfect the legal system, carry out the concept of "Ruling by Laws" and assist the investors in realizing their own rights according to law. On the other hand, upon the assumption that "individual is the best protector of his/her own interests", rational and efficient approaches of protecting investors' rights will be continuously provided. Apart from that, efforts will be made to increase legal and moral penalties for other market participants' infringement on investors' rights and interests, to achieve social justice and safeguard the social order. With the combination of the investor education, service and supervision, the SSE will protect the investors as well as establish an eligible investor system for developing qualified investors, on the basis of further supervision over listed companies and member units.
