CHINA’S securities regulator has punished six brokerages, including Great Wall Securities Co. and Huatai Securities Co., for violating rules in their margin trading businesses, a spokesman for the watchdog has said.

    The sanctions follow an investigation into the margin trading business of 46 brokerages, launched earlier this year by the China Securities Regulatory Commission (CSRC), that spooked investors and dragged down the market.

    In January, the CSRC banned three top brokerages — CITIC Securities Co., Haitong Securities Co. and Guotai Junan Securities — from opening new margin trading accounts for clients for three months.

    Shenzhen-based Great Wall Securities was suspended from adding margin finance and securities lending accounts for three months after selling services to unqualified investors and distributing so-called umbrella trust products, CSRC spokesman Zhang Xiaojun said at a briefing Friday.

    Zhang said Huatai Securities must rectify its processes and toughen oversight after it sold products to unqualified and higher-risk clients, while Shenzhen-based Guosen Securities Co. should increase internal compliance checks.

    The other brokerages sanctioned included Minmetal Securities Co., Huaxi Securities Co. and China International Capital Corp.

    China’s securities regulator is scrutinizing margin trading that has helped spur the Shanghai Composite Index to its highest level since March 2008.

    (SD-Agencies)