The Shanghai Stock Exchange (SSE) will take more frequent action
to suspend accounts of investors involved in irregular trading.
The announcement, expected today, comes after two individual
accounts in Wanlian Securities' Guangzhou business department were
halted by the SSE on April 30.
The individuals were found to be bumping up stock prices by
placing large buying orders but cancelling orders soon after, the
SSE said.
The suspensions followed an SSE halt trading order on the
account of an investor at Orient Securities' Shanghai business
department.
"Usually, they're suspended for two or three days at a time,"
said Chen Ji, an SSE spokesperson, yesterday, adding that the SSE
would impose longer suspensions if investors ignore early
warnings.
Before suspending stock trading, the SSE sent cautionary letters
to business departments and headquarters of security companies to
alert them of irregularities. The exchange also met with company
executives and told them to alert investors.
Authorities from the China Securities Regulatory Commission
(CSRC) said recently they would take more effective measures to
monitor irregular profit-making activities.
According to the CSRC, these activities include spreading rumors
to influence stock price, insider trading and factitious company
profits.
Hangxiao Steel Structure, for example, received a punishment
notification from the CSRC for illicit information disclosure
related to a large overseas contract, according to Hangxiao's
statement to the Shanghai Stock Exchange on April 30.
The CSRC, together with stock exchanges and local securities
regulatory bureaus, will establish a multi-layer network to monitor
irregular trading more effectively, the CSRC said.
The CSRC said recently that all listed companies should set up
an information disclosure management framework before the end of
June.
The government watchdog will also pay close attention to
companies with abnormal stock price movements, as well as those
making conflicting statements and those suspected of internal
trading.
(China Daily May 8, 2007)