The current stock market volatility will challenge the Chinese regulator’s ability to respond and implement reform, analysts said after the country’s securities chief acknowledged deep flaws in the system. Xiao Gang, Chairman of the China Securities Regulatory Commission (CSRC), delivered a lengthy speech at the CSRC’s annual work meeting in which he said the market rout since the summer had exposed many loopholes and deficiencies. The “abnormal” volatility reflected the immaturity of the Chinese market and its investors, incomplete trading rules and an incompetent regulatory system, he said. The controversial circuit breaker mechanism, which was suspended by the regulator just four days after its introduction, stoked anger among investors, who said it heightened market volatility and aggravated the liquidity crunch. Xiao’s comments pointed to further reform efforts in the future to stabilize the stock market. Dong Dengxin, Finance Researcher at the Wuhan University of Science and Technology, said that the CSRC needed to play the role of a referee rather than a market player, and that reforms would involve reducing direct administrative intervention, and enhancing effective market oversight and regulation.