Liu replaced 57-year-old Xiao Gang, who served as the former head of the Bank of China. (Photo : Getty Images)
Eradicating illegal activities and transforming the equity market into a more market-oriented place are two daunting tasks that the newly appointed security chief, Liu Shiyu, faces, China Daily reported.
For many experts, being the chairman of the China Securities Regulatory Commission requires expertise and bravery.
"I think the China Securities Regulatory Commission chairman has a challenging role," said Dong Dengxin, a finance research from the Wuhan University of Science and Technology, in an interview with China Daily.
"The Chinese capital market has not reached a high market-oriented and law-based level, so the public relies heavily on the government and this puts pressure on the job," Dong added. "Therefore, launching registration-based IPO reform and refining the Securities Law can be two focuses for the new chairman."
Lu Shugang, a law professor from China University of Political Science and Law, believes that Li's appointment just before the start of the legislature and advisory body's annual sessions next month indicates that the central government has not forgotten the capital market, a vital piece in transforming the Chinese economy.
According to Lu, Liu is highly fit for the role thanks to his vast experience in the financial market regulation and risk control.
"For Liu, cracking down on illegal activities and protecting small and medium investors' interests can be important tasks," said Li, who knows Liu personally.
With Liu spearheading the securities watchdog, the commission should be able to play a more active role in the amendment and implementation of the Securities Law.
Financial experts and analysts across the globe are also optimistic that Liu's appointment will bring a positive change to the equity market.
"The replacement of the stock market watchdog head announced over the weekend can be mildly positive for the stock market this week, as the market hopes for a new supportive policy," said Hong Hao, chief strategist and managing director at BOCOM International. "But in the long term, fundamentals will determine market direction."
Liu replaced 57-year-old Xiao Gang, who served as the former head of the Bank of China. Xiao has been head of the securities watchdog since March 2013. During his term, equity prices jumped, affecting government stock purchases and restrictions.
