China's securities regulator showed strong determination here on Monday to uproot its stock market headache that has baffled the country for years by saying that it would complete the on-going reform on split share structure within "a relatively short time".

"The pilot work would not last long and we are preparing for full implementation of the reform," said Shang Fulin, chairman of China's Securities Regulatory Commission (CSRC), at Monday's pressconference.

In other words, "we would not launch the third batch of pilot companies for the reform," Shang said.

Following years'of debate, China decided to end the split sharestructure which is the major problem in China's stagnant stock market. The CSRC announced the first two groups of companies selected for the experiment respectively on May 9 and June 19.

As a defect from history, the split share structure has been a barrier to regulated development of the capital market and basic reform on state assets management, said Shang.

To solve the problem would lay a solid foundation for sound development of China's capital market, Shang said. "Though the change is hard, the direction of reform is definite."

Shang's official statement again showed the government's firm decision to promote the mechanism construction in the capital market in a stable way.

Split share structure refers to the existence of a large volumeof non-tradable state-owned and legal personal shares. Due to that,only about one-third of the shares in domestically listed firms float on the markets. The structure puts public investors in a worse position than the actual controllers in making corporate policies and disposing of the firms' profits and assets.

Wu Xiaoqiu, director of Finance and Securities Institute of China People's University, described the structure as "a black hole sucking up the energy accumulated in the market."

He called the on-going reform "the most important and revolutionary institutional reform of the Chinese securities market since the country's stock markets were created in 1990."

The reform strategy is "correct" and will have a profound impact on the country's stock markets, he said.

Shang Fulin said reform on split share structure could not solve all the problems in the capital market, but it is a must to promote the development of the market.

Source: Xinhua