By Ding Qi (chinadaily.com.cn)
Updated: 2007-12-03 14:14

The securities regulator will further promote institutional investors' participation in China's stock markets, and encourage them to make more long-term investments. Shang Fulin, chairman of China Securities Regulatory Commission (CSRC), said on Sunday.

Speaking at a forum in south China's Shenzhen, Shang acknowledged that the number of domestic institutional investors has grown quickly in recent years and they have gained more influence. However, he said there is still a lot of work needed to promote their overall quality and build an efficient multi-tier capital market.

To meet this end, CSRC will continue to boost the investment ratio and scale by insurance, annuity, and social security funds in capital markets, introducing more diversified long-term institutional sources, the Shanghai Securities News quoted Shang as saying.

In addition, the regulator will gradually develop corporate bonds and financial derivatives to provide effective risk management tools for institutional investors and all market participants, he noted.

The chairman also vowed to improve supervision and crack down on illegal activities in the stock markets such as insider trading and price manipulation, in order to create a fair and rational market environment and prevent excessive speculation.

He called on institutional investors to explore effective ways to educate individual investors, and help them develop appropriate investment strategies.

CSRC will also continue its Qualified Foreign Institutional Investor (QFII) scheme, and furthermore encourage mutual fund managers to seek more investment opportunities overseas, according to Shang.

He reminded domestic institutional investors to learn from the experience of foreign counterparts in investment strategies and mechanisms.