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Haitong, GF, Huatai face China probe for client rules violation

Wednesday, August 26, 2015 - 00:13

[HONG KONG] Haitong Securities Co, GF Securities Co and Huatai Securities Co, three of China's largest brokerages, said they are being investigated by the nation's market regulator for suspected rule violations.

The China Securities Regulatory Commission is investigating the three brokerages for failing to review and verify client identifies and Huatai is also being probed over its compliance with "know-your-client" requirements, according to statements to the Hong Kong stock exchange Tuesday.

"The company will fully cooperate with the CSRC and strictly fulfil any obligations of information disclosure under regulatory requirements," Haitong said in its statement. "So far, the business of the company is under normal operations." The other two firms made similar remarks.

The CSRC suspended Haitong in January from adding margin-finance accounts for three months. The company was among brokers that let customers delay repayment of financing for longer than they were supposed to, the regulator said at the time.

BLOOMBERG