Regulators act to boost capital markets

China's financial regulators signaled a series of capital market reforms yesterday in Shanghai, varying from government bond trading to deepening reform of the tech-focused Star Market.

China's central bank chief Pan Gongsheng said it is studying how to implement government bond trading with the finance ministry, while rejecting the idea the practice would equate to quantitative easing.

Sovereign bond trading will be a gradual process, Pan said at the Lujiazui Forum in Shanghai yesterday.

He stressed the need to optimize the pace of sovereign bond sales and the debt's tenor structure.

The remarks come as expectations are growing that the PBOC will start purchases and sales of government bonds, after comments made public this year indicated that President Xi Jinping called for such a tool to regulate liquidity during a major financial meeting last year.

However, there have been few details on how this may be done and when it may begin.

Meanwhile, China's securities regulator said it will unveil fresh measures to deepen reform of Shanghai's Star market, as part of efforts to improve listed company quality and attract long-term capital.

Wu Qing, chairman of the China Securities Regulatory Commission, told the conference in Shanghai that the watchdog will crack down hard on market misbehaviors and strengthen regulation of high-frequency trading and over-the-counter derivatives.

Also, Li Yunze, the head of the National Financial Regulatory Administration, said at the forum that authorities will promote the development of the country's insurance industry.

They will explore allowing insurance funds to invest in gold contracts and related products on the Shanghai Gold Exchange, Li said.