Legislators are revising existing laws or scrutinizing new draft laws to meet the needs of the rapidly changing financial market, insiders said.

"Many of the stipulations fail to cope with the development of the financial market, some even become hurdles to further reform," said Zhu Shaoping, a senior official with the National People's Congress (NPC) Financial and Economic Committee.

Currently, the NPC- China's legislature - is revising the Company Law, Securities Law, Banking Law and Bankruptcy Law.

These laws were first formulated many years ago. Even after several revisions, they are still unable to oversee all aspects of the financial system, given the rapid development, especially liberalization of the market.

Shi Xiaomin, vice-chairman and secretary-general of the Chinese Research Society for Economic System Reform, said China's financial system lags 10 years behind its actual economic condition.

Zhu shared his point and added that financial legislation should bear part of the responsibility.

Take the four-year-old Securities Law as an example, regarding some high-risk issues, such as stock index futures products, separate operation of commercial banking, insurance and securities industries, it either exerts rigid restrictions or gives no provision at all.

As China pledges to build up a multilayer capital market, more and more products, tools and concepts are turning up. The existing laws did not foresee all these changes and fail to regulate them.

Some latest developments can not find any legal support or even collide with the current legislation.

Even worse, in order to support the local economy, some regional regulations observe and stipulate certain financial activities which State laws do not cover.

"As a result, some local regulations and State laws contradict each other," Zhu said.

The Qualified Foreign Institutional Investor scheme allows foreign players to invest in the renminbi-dominated domestic stock market, which is not subject to the current Securities Law.

"Such conflicts need to be solved as soon as possible by revising laws," Zhu said.

He added that some other issues, such as how to tackle the segregation of financial services, need more time to be properly tackled.

The legislators are also considering enacting new laws to legislate futures market, foreign exchange and financial leasing.

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