China Bans Brokerage CEOs From Time Off, Trips Amid CongressBloomberg News
CSRC is said to give order before party congress on Oct. 18
Policy makers want to ensure stable markets for the gathering
As China’s most important political event in years draws nearer, regulators have made it clear to the nation’s top financiers that they don’t want to see any major turbulence in markets.
The China Securities Regulatory Commission has ordered local brokerages to mitigate risks and ensure stable markets before and during the Communist Party’s twice-a-decade leadership congress next month, according to people familiar with the matter. The CSRC has also banned brokerage bosses from taking holidays or leaving the country from Oct. 11 until the congress ends, the people said. The regulator didn’t immediately reply to a faxed request for comment.
While China routinely takes steps to reduce market swings during key political gatherings, the travel ban on brokerage chiefs illustrates how seriously regulators are taking next month’s meeting. The congress, which starts on Oct. 18, is expected to replace about half of China’s top leadership and shape President Xi Jinping’s influence into the next decade.
Chinese markets have already rallied this year amid expectations of government support. The Shanghai Composite Index touched a 20-month high on Tuesday, while the yuan has strengthened 6.4 percent against the dollar this year. The gains have coincided with a drop in volatility on domestic equity and debt markets.
The CSRC told brokerages and futures companies to check for risks in their liquidity, operations and financial health, said the people, who asked not to be named as the information is private. The regulator also ordered firms to assess their information system security and credit risks and report their findings before October, the people said.
Brokerage bosses were told to avoid travel of any kind from Oct. 11 until the congress ends, including business trips.
Luckily for them, China’s national day holidays are coming up in the first week of October. Local markets will be shut for an entire week, providing plenty of time to recharge for the congress.
— With assistance by Steven Yang, and Amanda Wang