A man checks his personal credit report at a bank in Meishan, Southwest China's Sichuan Province. File photo: IC

The Securities Regulatory Commission in Northwest China' s Xinjiang Uygur Autonomous Region has conducted 560 credit checks on market entities and administrative licenses, providing pivotal references for decision makers and a stable environment for the capital market, according to a report by chinaxinjian.cn Thursday.

According to the report, the credit database, which was established by the China Securities Regulatory Commission, has been in operation since August 2014. As of the end of 2018, the database had compiled more than 429,000 credit records and more than 996,000 pieces of information on market entities.

The entities in the database include listed companies, non-listed public companies, stock and bond brokers, foreign securities institutions and private equity fund managers in Xinjiang. If an entity's credit history is tainted, its market behavior will be closely watched and restricted, the report said. 

Cong Yi, professor at the Tianjin University of Finance and Economics, told the Global Times that a mature and comprehensive credit database can be crucial in a capital market if it can address the problem of information asymmetry, thus creating healthier, more open and transparent environment for the capital market.

"Information asymmetry is one of the major problems faced in the capital market," Cong said. 

"This happens when the market entities disclose distorted information to the market. This misinformation can play havoc with the market if not handled properly," he said.

The credit database is under development in cities where the capital market is more mature, such as Hangzhou in East China's Zhejiang Province, Shenzhen in South China's Guangdong Province and Shanghai, Cong said. 

 "A healthy institution has to be set up to ensure that personal privacy is not infringed and the free flow of information is reached in the capital market," Cong said. 
Newspaper headline: Credit database helps create healthier capital market in Xinjiang autonomous region