Such frustration with the new arrangement can be understood. But it ignores the fact that the old system didn't seem to work as the capital market on the mainland expanded and became increasingly more complicated. As such, it is unrealistic to expect the CSRC to continue to retain firm and direct control over every aspect of the financial market.

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In most other financial markets, the watchdog agencies perform a supervisory, rather than a decision-making, role, giving the market operators, stockbrokers, investment banks, institutional investors and listed companies a free hand to operate according to a clearly defined set of rules and accepted best practices. The Chinese regulatory authorities have made the decision to adopt such a model. Doing so should allow it to concentrate its available resources on supervision, which obviously needed improving.

The much-maligned recent IPO madness should not be seen as an invalidation of the CSRC's reform efforts. It merely confirms that a lot more work needs to be done to convince market operators and corporate managements that it is in their best interests to play by the rules.

This is not going to be easy. Most market operators and corporate executives have little, or no, experience in self-discipline. Some of them obviously see the new system as an official nod to a free-for-all.

There appears to be a missing piece in the reform jigsaw puzzle. Of course, the rules are there for all to see. What is not clear is the power the CSRC has to bring rule breakers to the dock. A more important question that the authorities should ask is whether the penalties are serious enough to deter potential offenders.

Market reform deserves a chance to succeed. It will have a better chance to do so if the CSRC is empowered with the right tools and armed with sharp teeth.

The author is a senior editor with China Daily.

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