Reg­u­la­tors limit mul­ti­ple stock ac­counts

China Daily (USA) - - BUSINESS - By LI XIANG lix­i­ang@chi­

AChi­nese se­cu­ri­ties reg­u­la­tor has tight­ened reg­u­la­tion of il­le­gal mar­ket ac­tiv­ity by lim­it­ing each in­vestor to a max­i­mum of three stock ac­counts in the A-share mar­ket.

In­dus­try ex­perts said that the re­stric­tion on the num­ber of stock ac­counts could be a “dou­ble-edged sword” for the se­cu­ri­ties mar­ket.

“The bro­ker­age busi­ness of the se­cu­ri­ties firms might be neg­a­tively af­fected. But, it is nec­es­sary for the reg­u­la­tor to do some­thing about the il­le­gal mar­ket ac­tiv­i­ties, in­clud­ing ma­nip­u­la­tion us­ing mul­ti­ple stock ac­counts,” said an an­a­lyst at Hu­atai Se­cu­ri­ties Co anonymity.

The China Se­cu­ri­ties De­pos­i­tory and Clear­ing Corp Ltd, a Sta­te­owned clear­ing ser­vice com­pany, lastFri­day mod­i­fied the rules, which pre­vi­ously al­lowed an in­di­vid­ual in­vestor to open up to 20 stock ac­counts.

The CSDC said the rea­son to re­strict the num­ber of stock ac­counts is to bet­ter reg­u­late and mon­i­tor the ac­tiv­ity in the stock mar­ket.

“The uti­liza­tion rate for in­vestors with more than three ac­counts is very low. The ac­counts have taken up too many tech­ni­cal re­sources,” the com­pany said in a state­ment. Ltd, who asked for

“Mean­while, some in­vestors have taken ad­van­tage of mul­ti­ple ac­counts to engage in il­le­gal mar­ket ac­tiv­i­ties,” it added.

The new reg­u­la­tion be­came im­me­di­ately ef­fec­tive after the an­nounce­ment by CSDC. The com­pany said that in­vestors can con­tinue to use their ex­ist­ing ac­counts if they are prop­erly reg­is­tered and meet the real trad­ing need.

The CSDC has es­tab­lished a so-called black list sys­tem to mon­i­tor ir­reg­u­lar and il­le­gal trad­ing ac­tiv­i­ties to en­hance its reg­u­la­tion on stock ac­counts. It has fined more than 500 stock ac­counts, in­volv­ing more than 70 in­vestors, for ir­reg­u­lar ac­tiv­i­ties since it adopted a new­pol­icy last April to al­low in­vestors to have mul­ti­ple stock ac­counts.

The Chi­nese se­cu­ri­ties reg­u­la­tor re­moved the “one per­son, one ac­count” re­stric­tion last year to give in­vestors greater free­dom to man­age their stock port­fo­lios and switch among dif­fer­ent bro­ker­ages.

There were about 110 mil­lion in­vestors in China’s A-share mar­ket as of Au­gust, ac­cord­ing to data from the CSDC.

the num­ber of in­vestors in China’s A-share mar­ket as of Au­gust

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