China will lower the commission for stock trading from a rigid 0.35
percent to a flexible maximum of 0.3 percent, starting from May 1.
The new commission will apply to both yuan-denominated A shares and
foreign currency-denominated B shares.
Under the new arrangement, brokers could decide their own
commission level and register with relevant authorities.
The announcement by the China
Securities Regulatory Commission (CSRC) and other relevant
authorities was widely hailed as good news for the market, which
has been in depression for months.
Financial analysts pointed out that individual investors will be
the biggest beneficiary of the lower and flexible commission, as
big institutional investors have been enjoying actual commission
discounts for a long time.
The move, however, is certainly a blow to brokers, especially those
minor ones that have been drawn to the sector in recent years by
the industry's easy money, said Xiao Jianjun, an analyst with the
Guoxin Securities Co, Wang Fenghua, an analyst with the Aviation
Securities Company, said the new commission system will force
brokers to seek new profit sources such as consultation
services.
The CSRC's announcement said prices for such new services could be
negotiated by brokers and their clients.
(eastday.com April 9,
2002)