The market posted its biggest drop since this summer’s rout on Friday on news that Haitong Securities was being probed by China’s securities regulator.
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The three Chinese brokerages, whose alarming exchange filings last Friday prompted a 5.5% drop in the Shanghai Composite Index, issued near identical notices over the weekend, saying they were being investigated for margin trading violations.
In almost identical statements apparently aimed at appeasing investors Sunday, Citic Securities, Haitong Securities and Guosen Securities said their operations are nonetheless normal. Both companies said they received notices from the CSRC on November 26 about the probes.
Major indices tumbled in excess of 5% after regulators launched an investigation into security brokerage firms in the country.
Despite this measure however, financial markets in China have still been targeted by a litany of regulatory crackdowns in a bid to secure greater transparency for its domestic markets.
“While the benchmark Shanghai Composite Index (SCI) is below 4,500, we will not sell stocks we held as of July 3 and will continue to increase the stocks we hold as appropriate”, the senior executive at Guotai Junan told the newspaper.
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In September, the police ministry announced Citic executives were suspected of insider trading and leaking sensitive information.
