The China Securities Regulatory Commission (CSRC), in a circular to financial institutions and brokers, called for a complete clearance and standardization of third-party managed stock accounts, the financial web portal jrj.com reported on Tuesday.
According to the circular, regulators and securities companies should suspend trading of accounts inactive for a long time and with assets below requirements. These accounts can be re-activated only upon their holders' request and after verification by the securities regulators.
For other unqualified trading accounts with false registration information or transaction irregularities, CSRC also laid down another series of measures.
According to the circular, China Securities Depository and Clearing Corp should limit unqualified accounts from stock trading, designation transfers and guaranteed funds movement until they meet requirements for eligible accounts. The clearing body is also authorized to close unqualified accounts without outstanding assets.
Meanwhile, both exchanges in Shanghai and Shenzhen are to help restrict irregular transactions involving unqualified accounts. If an account fails to return to normal in time, bourses should suspend its trading, although protective measures are needed accordingly to minimize the relevant impact on the stock market, the circular said.
In addition, securities regulatory bureaus from all regions should work out a detailed schedule urging brokers to weed out the existing unqualified accounts in time and prevent adding new ones, according to the circular.
(China Daily August 15, 2007)
