BEIJING — During his keynote address at the WTO China Capital Markets Forum here today, Chairman and Chief Executive Officer of the American Stock Exchange Salvatore F. Sodano underscored the need for further transparency and openness in the Chinese capital markets.

The WTO China Capital Market Forum is part of the 5th China Beijing International High-Tech Expo. The event, which has the support of the Beijing Municipal Government and relevant Chinese Ministries, is one of the largest and most important forums on capital markets for China.

Mr. Sodano’s remarks focused on the importance of the continuation of measures to improve corporate governance and openness in the Chinese capital markets, as well as the need for common global accounting standards among the world’s exchanges. These reforms, he argued, will in turn bring equal investment opportunities for all investors, both international and Chinese.

New rules and regulations recently introduced by the China Securities Regulatory Commission (CSRC) such as independent directors, professional auditing and quarterly financial reports for publicly-listed companies are making the Chinese capital markets more attractive to foreign investment. Mr. Sodano, commending the CSRC for these reforms, added, “The ability to attract investment from the institutional
investment community will be a necessary factor in building liquidity and reducing the
effect of fragmentation in the market.”

In the past year, China has entered the World Trade Organization (WTO) and has won the right to host the Olympics in 2008, two significant achievements that have shown, Mr. Sodano pointed out, China’s determination to be a meaningful participant in the global economy. He added that the capital markets are a key sector in this post- WTO environment and Chinese investors should have the opportunity to participate in the global economy.

Mr. Sodano acknowledged that international markets also bore responsibility to facilitate economic integration and cooperation. “I have called upon the world’s capital market centers to accelerate efforts to reach agreement on a set of common global accounting standards. Such standards would create a level playing field among the world’s capital markets, providing investors with strict levels of protection and disclosure, while allowing global investors to participate in the expanding
opportunities around the world.”

Mr. Sodano offered concrete ways of attracting foreign investment such as introducing diverse and creative products, thus helping institutional investors to diversify and manage risks as well as increase liquidity. Mr. Sodano gave the example of mutual funds to illustrate his point and sees the Shanghai Stock Exchange’s plans of introducing Exchange Traded Funds (ETF) as a step in the right

The Amex introduced ETFs in 1993, and lists 117 of the 119 ETFs in the United States, which represents approximately US$85 billion in assets. The Amex established a joint venture with the Singapore Exchange last year to cross list and trade ETFs and continues to work with the Tokyo Stock Exchange and Euronext to do the same.

Mr. Sodano, who is also vice chairman of the National Association of Securities Dealers(R) (NASD(R)), was recently appointed to the committee formed to oversee the FTSE/Xinhua China series of domestic indexes for Mainland China, indexes designed to be used by both foreign and Chinese investors. Last year, Mr. Sodano was named to the Beijing Mayor’s advisory committee for the Zhongguancun Science
Park, a testament to his commitment to the development of the Chinese economy.

This is Salvatore F. Sodano’s second participation in the China Beijing Hi-Tech Week, having given a keynote address at the conference in 2001.