September 14, 2015 / 4:10 AM / 4 years ago

China brokers' shares tumble after CSRC imposes fines

HONG KONG, Sept 14 (Reuters) - Shares of four of China’s largest brokerages tumbled on Monday after fines and penalties were imposed by the country’s securities regulator on the companies and some of their executives for failing to conduct proper verification of clients.

The China Securities Regulatory Commission (CSRC) said on Friday it would punish Founder Securities, GF Securities, Haitong Securities and Huatai Securities following an investigation of the brokers.

Shanghai-traded shares of Haitong Securities slumped 7.2 percent in late-morning trading, while Huatai Securities fell 5.3 percent and Founder Securities dropped 4.6 percent, compared with a 2.9 percent decline in the benchmark CSI 300 index. Shenzhen-listed GF Securities lost 6.4 percent.

The four brokers were fined 178.5 million yuan ($28.03 million) and had 62.4 million yuan of profits confiscated by the CSRC, according to the regulator and securities filings by the companies.

Several senior executives of the brokers, including general managers, risk and compliance officers and technology staff, were also fined and received warnings from the CSRC.

The regulator has imposed about 850 million yuan in fines on brokerages and trading systems providers since mid-July, when a rout in Chinese equity markets gathered strength. The penalties come after Chinese authorities launched a series of investigations on the wild fluctuations in stock markets and a crackdown on alleged “malicious” short-selling or market manipulation.

The brokerages said in filings their businesses were operating as normal. Huatai Securities also said it will take rectification measures and “conduct a thorough and comprehensive review of its risk management for improvement”. ($1 = 6.3685 Chinese yuan renminbi) (Reporting by Elzio Barreto and Shu Zhang; Editing by Muralikumar Anantharaman)

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