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Article: Chinese Brokerages Mandated to Use Custodians: Third-party requirement hailed as milestone in securities risk mitigation.
- Article from:
- Securities Industry News
- Article date:
- December 4, 2006
- Author:
CopyrightCOPYRIGHT 2006 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Chinese brokerages will have to use third-party custodians by next summer, according to Xinyi Zhuang, vice chairman of the China Securities Regulatory Commission (CSRC). Firms that fail to comply could lose their licenses or find themselves unable to renew, he added.
Zhuang clarified the rule in mid-November at a ceremony announcing the new Guotai & Junan Securities and China Construction Bank Dragon Card, a debit card issued to customers of the Shanghai-based Guotai & Junan brokerage. "Guotai & Junan Securities is the first quality broker carrying out the rule that brokers should put client capital in separate accounts at custodian banks to ensure funds safety ...