China warns securities industry as crackdown on stock market irregularities expected to intensify
Securities regulator orders industry to step up supervision after brokerage staff, officials and journalist are detained over unethical trading
The mainland's top securities regulator has met key market players and industry associations to warn them against non-compliance as the authorities start to round up those responsible for the stock market slump.
China Securities Regulatory Commission (CSRC) chairman Xiao Gang summoned senior officials from 19 stock and futures exchanges, clearing houses and government-controlled industry associations directly under the authority in a recent meeting, ordering them to step up discipline and supervision, CSRC spokesman Zhang Xiaojun said yesterday.
We must act immediately to subdue [China’s rogue institutions]
Zhang said 22 cases involving market manipulation, insider trading and spreading market rumours had been handed to police for further investigation. Many of the suspects were securities industry staff.
Xiao's warnings reflect the mainland authorities' concerted effort to nab unscrupulous securities industry officials and fund managers amid a boom-to-bust cycle on the A-share market that has occurred despite Beijing's 1trillion yuan (HK$1.2 trillion) rescue funds meant to put a floor under the plummeting stocks.
On Tuesday evening, police took away 11 people - eight Citic Securities managers, two CSRC officials and a Caijing journalist - to assist with investigations into market irregularities.
The detention of the 11, three of whom are Citic executive committee members, was interpreted as a prelude to a wider crackdown on unethical brokerage staff after the latest market turmoil since last Thursday. The mainland market slump was also blamed for this week's "Black Monday", when global stock markets dived across the board.
"All signs show the top state leaders are increasingly concerned about the ailing market," said a source with knowledge of CSRC's views.