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- Regulator wants investors to know risks
Date: 25-May-2007 Sources: (Shenzhen Daily)
THE securities regulator has ordered brokerages to step up their program of educating investors, adding to the central bank's warnings about risks in an equity market that's nearly doubled this year.
Investors must sign caveat emptor declarations when they open brokerage accounts to acknowledge their awareness of the risks in buying stocks, according to a notice on the China Securities Regulatory Commission's Web site. Brokerages must warn customers of market risks through posters, seminars and mobile phone messages, the regulator said.
The key CSI 300 Index has soared to new records this year after the biggest one-day plunge in a decade Feb. 27, underscoring government concerns about boom-and-bust cycles in the stock market. The country had 90.8 million brokerage accounts as of April 19 as a record 17.2 trillion yuan (US$2.25 trillion) in household savings flooded the property and stock markets.
'Investor education and risk awareness must be incorporated into the work process of every brokerage,'' the regulator said in its notice, issued Wednesday to all securities traders. 'Awareness and prevention of risks must be clearly demonstrated in services provided by the brokerages.''
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