In Depth: China Amps Up Scrutiny of Freewheeling Securities Firms

Many of China’s securities firms have been stung for lax compliance recently, while new rules aim to restrict the sector’s capital-intensive businesses.

China’s securities firms are witnessing a stricter regulatory environment as the country’s top securities watchdog has increased scrutiny of their capital-intensive activities and internal workings.

The China Securities Regulatory Commission (CSRC) in May revised rules to strengthen the supervision of listed securities firms, stipulating that they should focus on their core businesses while capital-intensive activities should be conducted with caution.

Meanwhile, the commission has been handing out more warnings and penalties for missteps such as lax compliance management and risk oversight, including a recent warning against SDIC Securities Co. Ltd.’s branch in North China’s Hebei province.

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