The mainland's securities regulator soon may start charging brokerages up to 5 per cent of their operating incomes to bolster the investor protection fund, media reported. The China Securities Regulatory Commission (CSRC) had finished consulting with a number of securities firms over the details of a new regulation and was expected to officially implement the levy soon, Securities Times said. The CSRC rules released in April require securities companies to pay a small percentage of their operating incomes into the fund twice a year, on July 15 and January 15. The source said the final version would be released in time for the July 15 deadline to offer securities firms guidelines on how to submit their contributions. The central government established the fund in 2005 with 6.3 billion yuan of registered capital and a 61.7 billion yuan credit line from the central bank. The fund is the country's first protection for individual stock investors in the event of a financial crisis or bankruptcy of a securities brokerage. Apart from brokerages, the fund will also collect money from interest earned from funds tied up for initial public offerings and refinancings and trading fees set aside by the Shenzhen and Shanghai stock exchanges. The CSRC will rate securities companies according to their financial strength. The best-managed firms will pay close to the minimum 0.5 per cent contribution. Guotai Junan Securities has predicted that securities companies could make up to 200 billion yuan in operating income this year. This offers the prospect of adding between one billion yuan to 10 billion yuan to the fund. Jing Ulrich, chairman of China equities at JP Morgan, said the investor protection fund was more like a gesture rather than an offering of real help, especially when the stock markets' total value was already close to that of the mainland's GDP. 'In the event of a market crash, this fund will probably not be adequate enough to compensate investors' losses. The government is still likely to be the one to step in and clear things up,' Ms Ulrich said. She suggested a better alternative would be pushing securities firms to buy insurance to protect investors from potential market risks. The Securities Times quoted a securities company source as saying that paying the required contributions would not be a big problem because brokerages had been enjoying big incomes this year, thanks to the mostly bullish stock markets.