China’s securities regulator notifies leading brokerages of investigation


The “Black Monday” that has had severe effects across markets in China and the rest of the globe appears to have added an impulse to the work of Chinese regulators too.

Several leading securities brokerages in China, including GF Securities Co Ltd (SHE:000776), Huatai Securities Co., Ltd. (SHA:601688), and HAITONG Securities Company Limited (SHA:600837), all reported they received formal notices from the China Securities Regulatory Commission (CSRC), dated August 24, 2015.

The notices inform the brokerages that they are under investigation for alleged violations of the Securities Law of the People’s Republic of China. In particular, the CSRC will look into suspected breaches of law with regard to the company’s “failure to review and verify the identity of clients”.

Haitong Securities said in a special statement that:

“During the investigation, the Company will fully cooperate with the CSRC and strictly fulfil any obligations of information disclosure under regulatory requirements. So far, the business of the Company is under normal operations.”

A broadly identical statement was issued by GF Securities:

“During the investigation, the Company will actively cooperate with the CSRC’s investigation, and will strictly fulfil the information disclosure obligations according to the regulatory requirements. Currently, all business operations of the Company remain normal. Investors are reminded to consider the risks involved in making investment decisions.”

According to a report from the Financial Times, the investigation covers at least one more brokerage – Founder Securities Co Ltd (SHA:601901), which got a notice from the Chinese regulator over the same issues.

On a separate note, Xinhua reported that the Chinese stock slump has led to an investigation into CITIC Securities Company Limited (SHA:600030) too, with eight of its employees under suspicion of illegal securities trading. CITIC said it had not received any formal notice from the CSRC over such an investigation.

For the official announcement from Huatai Securities, click here.

For the official announcement from GF Securities, click here.

For the official announcement by Haitong Securities, click here.

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China's securities regulator notifies leading brokerages of investigation

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