CHINA plans to allow brokerages and securities investment advisers to expand their wealth management business, sources with direct knowledge of the matter said.

    The move is the latest in a series of steps taken to liberalize the country’s finance sector.

    Under the new rules drafted by the Securities Association of China, qualified consultants may step into the shoes of investors and invest or trade in shares, funds or futures, among other things, on their behalf, said the sources, who declined to be identified.

    Currently, brokerages and securities investment advisers may only provide consulting services, but only investors can make the decision to buy or sell assets.

    In order to reduce risk, the proposed rules include certain conditions to trade such as the need for an appraisal of investor appetite for risk and the requirement to match that with appropriate asset allocation, the sources said.

    The rules also call for good risk disclosure, good account security management to prevent the transfer of assets, while prohibiting misrepresentative marketing, they said.

    A spokesman at the Securities Association of China confirmed that draft rules had been sent to brokerages and securities investment advisers, but declined to provide further details.

    China is planning to open up the brokerage industry to non-traditional players, as securities firms’ profits have soared on a bull stock market. (SD-Agencies)