Securities brokers shall not handle securities subscription or trading for customers.

1 Customers purchase of securities, settlement of securities trading or customers withdrawal

Article 48 Securities lending and borrowing referred to in this article means that in the securities trading at the stock exchange or other securities trading places that have been approved by the State Council, securities firms lend capital or securities to customers for them to buy or sell securities based on the corresponding collaterals provided by the customers.

(4) Where any securities broker accepts entrustments of clients to handle such issues as securities subscription and trading.

Securities account opened by the securities firm for securities assets management customer should be submitted to stock exchange for filing within 3 trading days.

Article 41 A securities firm engaged in securities business for its own account is limited to trading of legally issued stocks, bonds, warrants, securities investment funds or other securities recognized by the securities regulatory agency under the State Council.

(3) Where a securities firm, an asset management agency, a securities registration and clearing agency use trading settlement funds, trust funds and funds and securities in secured accounts of clients in violation of provisions

The designated commercial bank shall sign a customer trading settlement funds custody contract with the securities firm and its customer, setting forth matters such as the deposit and withdrawal, transfer and enquiries of the trading settlement funds, and shall open a general account of customer trading settlement funds for the securities firm according to the requirements of net amount settlement and delivery versus payment of securities trading.

2 Customers payment of commission, expenses or taxes related to the securities trading

(11) Where a securities firm does not deposit or manage trading settlement funds, trust funds and funds and securities in secured accounts of clients according to provisions

Self run securities accounts of the securities firm should be submitted to the stock exchange for filing within 3 trading days of account opening.

Article 32 A securities firm should establish information inquiring system to ensure customers inquiring entrustment record, trading record, securities and balance during business hours of the securities firm, as well as other information such as name, practice license of the business operator and securities broker of the securities firm, certificate number of securities broker, etc.

Article 57 Where a securities firm carries out securities brokerage business, its customer s trading settlement funds shall be deposit in the designated commercial bank, and shall be managed separately in the name of each customer.

Article 80 Where a securities firm entices its clients to conduct unnecessary security trading or uses assets of its clients to take unnecessary security trading in its dealing with portfolio management business, it shall be punished according to the provisions prescribed in Article 210 of the Securities Law of the People s Republic of China.

Article 92 Where a custody manner of trading clearing funds of clients of a securities firm is not in accordance with provisions prescribed in Article 57 hereof, the securities firm shall be ordered to made adjustment within certain period by the securities regulatory agency of the State Council.

The securities regulatory agency under the State Council shall compare and verify relevant data submitted by relevant organs on the customer s trading settlement funds, the trusted funds and the funds and securities in the customer s guarantee accounts to timely detect the illegal use of the funds or securities.

(7) As regards reserve repo securities, it is required to make disclosure of the beginning balance, ending balance and the agreed reserve repo price at maturity of reserve repo securities at each trading place.

Article 76 A securities firm shall undertake real time monitoring on trading behaviors of its self operation accounts and portfolio management accounts.

(3) Failing to report to the securities regulatory agency of the State Council when it finds trading settlement funds of its clients are used illegally.

The custody manner of trading clearing funds of clients of a securities firm shall meet requirements within 1 year since the implementation of provisions hereof.

PARIS In the early phases of the financial crisis, it was fashionable to argue that the United States system of regulation needed a fundamental structural overhaul. Differences of opinion between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) had obstructed effective oversight of investment banks and derivatives trading (only the US believes that it makes sense to regulate securities and derivatives separately).

It may be worth the effort to explore the possibility of establishing common subregional trading platforms under which local exchanges join forces to develop a trading and clearing system that allows investors to trade securities on a regional basis.

It shall make disposals according to trading rules and member management rules in a timely manner when it finds any abnormality, and report to the securities regulatory agency under the State Council.

Tom Hoenig, a former president of the Federal Reserve Bank of Kansas City and now a top official at the Federal Deposit Insurance Corporation, advocates separating big banks commercial and securities trading activities. The cultures never mesh well, and big securities businesses are notoriously difficult to manage.

True, major commercial banks, like Citibank and Bank of America, tottered, but they were not at risk because of their securities underwriting for corporate clients or their securities trading divisions, but because of how they (mis)handled mortgage securities. Mortgage lending, however, is a long standing activity for commercial and savings banks, mostly unaffected by Glass Steagall or its repeal.

Article 35 A securities firm should establish and implement effective management system to prevent staff holding or trading stocks directly or in either false name or other s name, or receiving gifted stocks from others.

The designated banks, assets custodian organs and the securities registration and settlement organs shall refuse application or instruction to use the customer s trading settlement funds, the trusted funds and the funds and securities in the customer s guarantee accounts which exceeds the scope stipulated by Articles 53, 54 and 60 of this Regulation

if they find that the customer s trading settlement funds, the trusted funds and the funds and securities in the customer s guarantee accounts have been illegally used or other abnormal situations, they shall immediately report to the securities regulatory agency under the State Council and send copies to relevant supervision and management organs.

Article 26 If a securities firm and its domestic branch are engaged in securities business prescribed in Article 125 of the Securities Law, they should follow the Securities Law and provisions of this Regulation.

Article 38 If a securities firm is engaged in securities brokerage business, it can entrust staff outside of the securities firm as securities broker, engaging in attracting and providing service for customers as agent.

(17) As regards income from selling repurchase securities, it is required to make disclosure of the beginning balance, ending balance and the agreed repurchase price at maturity of each trading place.

Article 37 If a securities firm is engaged in securities brokerage business, it should audit whether capital and securities in customer s account are sufficient or not.

This is more prevalent in the US, where regulators salaries are very low, especially in the Securities and Exchange Commission and the Commodity Futures Trading Commission. Turnover among senior and not so senior people in these agencies is very high.

Article 20 If a securities firm has two or more kinds of securities brokerage business, securities assets management business, financing with capital and securities, securities underwriting, securities sponsors, its board should set up remuneration and nomination committee, auditing committee and risk control committee to perform rights prescribed in company regulation.

The securities firm should sign entrustment contracts with securities brokers who accept such entrustment, issue securities broker certificate, define authorized scope of securities broker and supervise working behavior of securities broker.

Article 50 A securities firm that carries out securities lending and borrowing business shall sign a securities lending and borrowing contract with the customer, and shall open a customer securities guarantee account with the securities registration and settlement organs, and a customer funds guarantee account with the designated commercial bank in the name of the securities firm in accordance with the provisions of the securities regulatory agency under the State Council.

Without securities business license, the securities firm and its domestic branch shall not run securities business.

The securities broker should have securities working qualification.

Securities brokers should work within authorized scope of the securities firm and show securities broker certificates to customer.

Article 46 A securities firm engaged in securities assets management business shall not have the following act

If the securities firm closes all securities business, disbands, goes bankruptcy or revokes domestic branch, it should publicize in newspaper appointed by the securities regulatory agency under the State Council and submit securities business license to the securities regulatory agency under the State Council for deregistration based on regulation.

Article 44 If a securities firm is engaged in self run securities business, its risk controlling indicators such as ratio of total securities value and company net capital, ratio of value of one type of securities and net corporate capital, and ratio of quantity of one type of securities and total issuing quantity of this type of securities should comply with prescription of the securities regulatory agency under the State Council.

Trading in influence

Trading In Hate

Article 56 Where a securities firm carries out securities lending and borrowing but does not have sufficient funds or securities, it can borrow from the securities financial companies.