Shanghai financiers say China exchanges must rectify flaws, propose changes: The Paper

[SHANGHAI] Some of Shanghai's top financiers said the development of China's exchanges have been hampered in part by management shortcomings and proposed a raft of changes, including improvement in corporate governance, The Paper reported on Monday.

The proposal comes amid an intensifying rift in Sino-US relations on changes in the conditions Chinese firms must meet to list on US exchanges and a record rally on the Hong Kong stock exchange (HKSE).

The comments by the financiers were made in a proposal signed by the chairman of the Shanghai Gold Exchange and the presidents of the shanghai branches of both The Export-Import Bank of China and the Agricultural Bank of China during a meeting of Chinese Communist Party members in the city, the paper reported.

The 22 signatories to the proposal were critical of the management of the country's stock exchanges, saying it has hampered the development of the capital markets and their international competitiveness as well as undermining the city's development into a global financial center, according to the paper.

The signatories proposed urgent reform to the shareholding structure of the exchanges, suggesting they be integrated under a group holding entity.

The Shanghai Stock Exchange should improve corporate governance in order to increase transparency and its understanding of profit with a view to becoming more commercial.

It should also act with other exchanges as a group and list on both the SSE and HKSE, The Paper added.

REUTERS