China regulator admits 'shortcomings' after market turmoil
The head of China's market regulator issued an unusual apology Saturday for volatility in the country's markets, acknowledging "shortcomings" in the way they have been supervised.
"The abnormal fluctuations on the stock exchanges have revealed the immaturity of the Chinese markets, inexperienced traders and a trading system that is imperfect," said Xiao Gang, head of the China Securities Regulatory Commission (CSRC).
"They also exposed shortcomings in the supervision, as well as regulation mechanisms that are inappropriate and ineffective," he said, according to a transcript of a speech given to colleagues that was posted on the CSRC website.
His comments came after fresh losses last week on the Shanghai and Shenzhen markets, which had already shed around 40 percent of their value over several weeks this summer despite government efforts to prop them up, including massive share purchases and attempts to restrain panic-buying.
"Certain institutions have allowed illegal and irregular transactions to prosper, instead of upholding their responsibilities and stabilising the market," Xiao said.
Several brokers are under investigation, notably on suspicion of insider trading.
Xiao said "deep lessons" had to be learned from the recent turmoil, with a push to "intensify reforms, reinforce supervision (and) support the development of healthy capital markets" by opening them up.
China's markets remain cut off from the rest of the world due to tight restrictions on capital flows.
Last week, the regulator suspended a new "circuit breaker" mechanism that had fuelled investor panic and a global rout by automatically closing Chinese markets early twice in just four days.
Beijing authorities launched a wave of investigations targeting the financial sector at the end of 2015 in the wake of the summer's stock market rout, with CSRC deputy chief Yao Gang under investigation for suspected corruption.