China revises risk management rules on securities firms

Updated: 2016-04-09 09:48

(Xinhua)

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China revises risk management rules on securities firms

Investors at a securities brokerage in Qingdao city, Shandong province, Jun 16, 2015. [Photo/IC]

BEIJING - China's securities regulator is seeking to revise its risk management rules on securities firms to adapt to new changes in the industry.

The China Securities Regulatory Commission (CSRC) on Friday released its draft plan to change the way it calculates net capital and risk capital requirement of securities firms.

It also plans to adjust the indicators for leverage and liquidity regulation of the industry.

The revised calculation will see the industry's net capital increase by around 20 percent and that of risk reserve capital rise two times, which will make the risk coverage indicator more "reasonable," according to the CSRC.

Other readjustment include lowering the ratios of net capital to liabilities and net capital to net assets.

"As the securities firm structure and business products grow more diversified, risks are also becoming increasingly complicated, making the current mechanism unable to deliver proper risk controls," CSRC spokesman Zhang Xiaojun explained the reason for the change.

The CSRC said it is seeking public feedback on the draft.

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