Securities Brokers Must Hold Permits in Practice from April 13
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From April 13 onwards, the “Interim Measures on Administration of Securities Brokers” (hereinafter referred to as the “Interim Measures”) will be officially implemented. Securities brokers can not practice without certificates of securities brokers, and investors should enhance the self-protection awareness and take the initiative to check the relevant information stated clearly in certificates.
According to requirements of the “Interim Measures” and relevant self-regulation rules, securities brokers should register their practices with the Securities Association of China (SAC) through their securities companies and receive relevant certificate of securities broker from their securities companies before conducting practices. In the course of their practices, securities brokers should take the initiative to show their certificates to clients. Practice activities of securities brokers should not exceed the scope of agency authority as stated in their certificates, and securities brokers shall not conduct any of the following acts: 1, open accounts, cancel accounts, transfer, subscribe for or trade securities, fund deposit and withdrawal, transfer, inquiry, etc. on behalf of clients; 2, provide or disseminate false or misleading information to their clients, or to induce their clients to conduct unnecessary trading of securities; 3, stipulate to share return on investment with their clients and make commitment of the proceeds of the trading of securities or compensation for loss in securities transactions; 4, take improper means to attract clients, such as belittling competitors or get into competitors’ business place to solicit clients; 5, leak trade secrets or privacy of clients; 6, serve as intermediaries, or provide guarantees or other facilities for financing between clients; 7, provide clients with illegal service places or trading facilities, or to engage in activities such as soliciting clients or serving clients through the Internet or the news media; 8, entrust others to engage in activities such as soliciting clients or serving clients; and 9, harm legitimate rights and interests of clients or disturb market order or other activities.
The practices of securities brokers have direct connection with the interests of investors. Investors should enhance the awareness of self-protection, and take the initiative to examine certificates of securities brokers in cases of securities brokers’ publicity, promotion and services. They should make scrutiny of certificates to find out identities of securities brokers, securities companies and business departments where they work, agent authorities, agency periods, geographical scopes of practices and prohibited acts. If they find that the practices of securities brokers are suspected of violating regulations, they should refuse to accept the publicity, promotion and services, and can report to the China Securities Regulatory Commission and its regional bureaus as well as the SAC.
Investors can verify the authenticity of certificates of securities brokers and the information stated therein, through the website of the SAC, or verify with securities companies as stated in the certificates through on-site inquiry, or by telephone or network.
To support the implementation of the "Interim Measures", the SAC has released some self-regulation rules, such as the "SAC Practice Code for Securities Brokers (Trial Version)" and the "SAC Interim Measures on Registration of Practices of Securities Brokers". At present, the rules of regulation and self-regulation related to administration of securities brokers are complete on the whole. Upon verification and recognition of the CSRC’s regional bureaus, qualified securities companies can entrust securities brokers to engage in activities such as soliciting clients or serving clients in accordance with laws.