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Chinese Government Asked Brokerage Companies Not to Exaggerate Market Conditions

Shanghai Securities News recently reported that the Chinese government issued an administrative memo to all security brokerage companies requiring tighter internal control on offering public comments about the financial market. The memo was to “maintain normal capital market order.” The memo required all brokerage companies to “carefully and legally” study the market information and stop “blindly” exaggerating “market hot spots.” It also asked the companies to establish an internal personnel control process to review public comments. In the meantime, the memo demanded higher quality data analysis as well as quality assurance. Finally, it required the brokerage firms to build formal contractual relationships with media companies authorized to publish the public comments, advising that they should establish and monitor accountability on both sides. The memo provided two examples of firms that did not follow appropriate protocols and received punishment.

Source: Shanghai Securities News, September 19, 2018,qy-201809-4274705.htm