Date
20 September 2017
China's securities regulator is putting margin trading and short selling under the microscope. Photo: Bloomberg
China's securities regulator is putting margin trading and short selling under the microscope. Photo: Bloomberg

CSRC to take another look at securities brokers’ books

China’s securities watchdog is expected to mount a second round of on-site random inspections of securities brokers’ margin trading and short-selling operations Thursday, according to the 21st Century Business Herald.

One unnamed broker said the China Securities Regulatory Commission told the firm Tuesday night that its financing business would be inspected on April 24, the newspaper reported Thursday.

The checks follow an initial round between October and November last year. The CSRC is seeing if the margin trading, short selling and other financing activities comply with regulations, the report said.

The inspections have revived industry fears of penalties, with five of 11 securities brokers punished in the fallout from the first round.

“There are minor irregularities in the margin trading and short-selling business to some extent… It’s made us very nervous,” a securities broker not included in the checks said.

One broker who was investigated last year said the inspection was very tough.

“They demanded we prepare original copies of [documents for] the financing business for them to check, and also pulled out all the trading data,” he said.

– Contact HKEJ at [email protected]

JH/JP/SK

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