Date
29 May 2017
Many retail investors have taken a cautious stance toward the market. Photo: AFP
Many retail investors have taken a cautious stance toward the market. Photo: AFP

China tightens regulation on multiple stock accounts

Chinese authorities have limited the number of stock trading accounts investors can hold in a bid to better regulate and monitor the A-share market.

Retail investors will only be able to own three accounts in a single mainland market, down from 20 previously, the Wall Street Journal reports, citing a statement on the website of the China Securities Depository and Clearing Corp., a government agency that tracks accounts.

The move signals a continued cautious stance toward the domestic stock market, which crashed last year, the newspaper said.

Investors who already own more than three accounts can keep the accounts if they are being used, but the agency will consider accounts that have not been used dormant, it said.

“We believe the regulators have learnt the lesson from last year’s market crash,” the Journal quoted Judy Zhang, head of China banks and brokers at Citigroup in Hong Kong, as saying.

“The key intention of this new rule is to remind investors that the crazy bull will not happen again.”

The new rules are not expected to affect the domestic market too much because many retail investors have taken a cautious stance toward the market.

Individuals who have opened more than three accounts represent only 2.6 percent of investors that have opened accounts since the regulator implemented a rule last year that they may not have more than 20 accounts, Citigroup said.

The utilization rate of these accounts is only 8.6 percent, it added.

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CG

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