Guo Shuqing, Chairman of the China Securities Regulatory Commission.  Photo: Information Times

Translated by Andrew Vanburen from a Chinese-language piece in Information Times

AS BEARISH AS the Chinese capital markets are these days, things would be positively “grizzly-esque” if not for the perseverance and gusto of the country’s rapidly rising ranks of retail investors, said Guo Shuqing, Chairman of the China Securities Regulatory Commission.

“Retail investors have made tremendous contributions to the equity markets and things would be a lot worse if not for them,” said the chief of the country’s stock market watchdog at an investment seminar.

His praise did not end there, as Guo added that institutional investors should “take a cue” from the patience and long-term thinking of retail investors in the country to help stabilize and promote the healthy growth of listed enterprises in Shanghai and Shenzhen.

“Fund managers operating in the country should also do more to promote the idea of an ‘investor-centric’ mentality, putting the interests and well-being of the individual investor at the forefront of their everyday decisions.

“This will help promote trust and confidence among retail investors and also help to better manage risk across the entire range of capital market products available today,” Guo said.

Retail Investors 'Bill of Rights'

The chief of China's securities regulator has high praise for the country's retail investors.  Photo:

He added that fund managers should do more to provide retail investors with the same amount of transparent guidance on the risk levels of various options that they do for the more well-heeled institutional investors.

Speaking at the gathering of leading figures from China’s financial sector, Guo said that since the establishment of the country’s inaugural securities investment fund firm in 1998, the PRC’s wealth management services industry has seen vigorous development and diversification over the past 14 years -- and individual investors have been the backbone of the sector’s growth and success.

“That being said, funds and asset management firms need to accelerate the transition of the industry into a more modern, sophisticated wealth management model.”

Guo added that from the earliest closed-end funds to the more diversified open-ended funds of today -- and from trust firms to bank-based financial management – all these various forms and facets of asset management services and products demonstrate the rich diversity and wealth of choices available to investors in modern day China.

“When money managers put the interests of their individual client investors first and foremost, then and only then will the entire financial industry offer a level playing field to all participants.

“Furthermore, a transformation to this way of doing business will help to spread risk more evenly across the entire sector and encourage even more to participate in the limitless possibilities that exist in a healthy, smooth-running, fairly administered marketplace.”

See also:

Whither China Shares?

CHINA SHARES: Market Watchers All Over Map

FOREIGN TASTES: What QFIIs Are Buying In China

HALF HEARTED: 50% Of PRC Firms Expect Weaker 1H

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