ABSTRACT

Introduction Since its establishment, the Chinese securities market has made many improvements; in particular, after the new Securities Law came into force, the regulatory regime reached a more effective level. But it should be admitted that the securities regulation in China is still in need of improvement. In respect of securities professionals, on one hand, they constitute an essential part of the market, and facilitate the establishment of a healthy and active securities market. On the other hand, they may assist illegal securities transitions. Some of the existing scandals have illustrated these issues. It should be noted that in these scandals, it was common that the professionals took advantage of information, which was obtained directly from their employment. The main aim of this chapter is to analyse the internal and external relationship between information disclosure and securities professionals in order to establish an effective regulatory regime. In this chapter, historical and current regulatory approaches will be examined. The Securities Law, Chapter VIII (Securities Trading Service Institutions) established the fundamental legal requirements for securities professionals. It focuses on the investment consulting institutions, financial advising institutions, credit rating institutions, asset appraisal institutions, accounting firms and their staff.1 Furthermore, other legislation and regulatory rules will be examined, for example, the Lawyer’s Law. Moreover, the function of the Credit Rating Agencies (hereafter the CRAs) and securities lawyers will be analysed in detail. As typical examples of the above professionals, the regulatory approaches of the CRAs and securities lawyers are important issues to be examined.