Chinese regulator tightens control of brokerages to protect investors

SHANGHAI (AFX-ASIA) - The China Securities Regulatory Commission (CSRC) has issued new rules requiring securities companies to strengthen protection for customers by separating investors' share trading deposits from their own funds, according to a report in China Securities News.

The new rules, designed to prevent brokerages embezzling, misusing or gambling on the stockmarkets with investors' funds, will take effect at the beginning of next year. 

The CSRC said investors' money covered by the rules includes deposits, share and bond dividends, and proceeds from share sales in the local currency A-share markets. 

Foreign currency B-shares will be covered by a separate set of guidelines.

All A-share investors' would have to be placed in independent deposit and settlement accounts at qualified commercial banks, so that banks could control investors' money, the newspaper said.

 Brokerages' own capital must be kept separate from investors' funds, it added.

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