DRAFT LEGISLATION LOOKS TO REGULATE THE BROKER SYSTEM
October 15, 2008 | BY
clpstaff &clp articles &China Securities Regulatory Commission has announced draft regulations on brokers to further supervise and regulate their activities in the stock market.…
China Securities Regulatory Commission has announced draft regulations on brokers to further supervise and regulate their activities in the stock market.
According to the Commission, the new regulations would prohibit brokers from manipulating customers' accounts or providing investment counselling to clients.
Michael Hai, partner at Global Law Office said that the regulation will improve protection for investors. “The draft legalizes the securities broker system and strengthens the administration and supervision of brokers' activities.”
But as brokers are not allowed to provide their clients with investment advice, the may take away one of the most material functions of securities brokers, he said.
Yet by specifically detailing the scope of the responsibilities of brokers the draft regulations could indirectly help the enhancement of the market's transparency.
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