Sichuan Earthquake Aftermath

By Jialing Dai  •  May 26, 2008  •  Securities Industry News  •  294 words

Chinese regulators have ordered brokers to encourage investors to trade online and by telephone in order to minimize the impact of the May 12 Sichuan earthquake on normal market operations. “The first priority for brokerages and futures firms is to ensure the safety of investors and employees,” China Securities Regulatory Commission (CSRC) chairman Shang Fulin said during the securities watchdog’s meeting on May 19. “Brokers should encourage their customers to use off-site trading tools such as online trading and call centers.”

As of May 18, 97 of securities firms’ 194 Sichuan branches remain closed, according to Fulin. Stock trading in 66 listed companies located in the Sichuan province was suspended following the earthquake, though 59 of them have since resumed trading.

Shang also asked firms to work with local authorities to assess the damage at their branches and rebuild their trading systems as soon as possible. The CSRC urged listed companies affected by the disaster to disclose real-time information and provide all required investor services.

“Our company owns nine branches in Sichuan–all of them are fully operational now and the staff is safe,” said Ziying Song, spokesperson for Shanghai-based Shenyin & Wanguo Securities Co. “We will inform investors to use off-line transaction tools by sending them short messages via cell phones.” She added, “We will also post notices at our outlets to advise investors. Our staff will help them use online trading and call centers.”

Song noted that Shenyin & Wanguo’s technology system has the capacity to deal with a possible increase in trading volumes via the Internet and telephone. “But as of now, there is no congestion,” she added.

A spokesperson for Shanghai-based Guotai Junan Securities, one of China’s largest brokerages, said that his firm is also complying with the government’s recommendations. CSRC officials declined to comment further.


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