CHINA / Overseas Press |
Brokerages should warn investors of risks(Dow Jones)Updated: 2007-02-26 16:38 SHANGHAI - China's stock exchanges said Monday securities companies must warn investors of the risks involved in making securities investments when they introduce products or explain securities regulations to them. The Shanghai and Shenzhen stock exchanges said in rules issued Monday that brokerages must also examine their internal risk-management systems and assist in any inspections made by the bourses. They said the rules, which take effect May 1, are aimed at improving their oversight of member brokerages. The rules are the latest attempt to control risks in the country's stock markets, which rocketed last year after a multiyear slump and triggered concerns about a potential bubble. China's stock market benchmark, the Shanghai Composite Index, more than doubled in 2006 because of flush liquidity and a strong yuan. Brokerages can turn down trading orders if they find any "abnormal"
transactions have been made by their clients, and such transactions must be
reported to the two exchanges, the rules state. |
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