China will accelerate the establishment of the
compliance-management system among brokerage firms to meet the
demand of opening the industry to foreign peers.
Compliance consists of policies and procedures that guide
adherence to laws and regulations to improve risk control.
The Securities Association of China held its first training
class on the compliance-management system this month for as many as
300 company executives and regulatory officials.
This signals the installation of a compliance-management system
among brokers will be operational, said a statement on the Website
of the association yesterday.
Heads of compliance departments of Citigroup, Lehman Brothers
Inc, Royal Bank of Canada and BOC International Holdings Ltd
introduced their practices during the training class.
"The establishment of a compliance-management system will have a
direct impact on the well-being of brokerage firms," the statement
said. "It is an integral part to constitute brokers' core
competitiveness.
"The system is also a key element to guarantee the survival and
development of the industry, as well as to raise the effectiveness
of regulators' supervision, and to meet the demands of brokers for
growth and innovation."
The establishment of the system requires people who are
proficient in the securities business and related laws and
regulations. It also requires an independent department that has
the power to look into all business-management sectors of the
firm.
"The China Securities Regulatory Commission is doing the right
thing ... compliance is so important for brokers," said Victor
Wang, a Hong Kong-based analyst at UBS AG, according to Bloomberg
News.
"I don't believe the short-term impact is huge. It will take
years for brokers to implement such changes into daily
operation."
Earlier this year, China issued a compliance-management guidance
for commercial banks. Details of the rules for brokerage firms have
not yet been released.
(Shanghai Daily November 30, 2007)
