REGULATORS in China have banned brokerages from hiring social media influencers to attract new customers, turning off the spigot on one of the most popular ways to gain clients in the intensely competitive sector.

The China Securities Regulatory Commission (CSRC) told securities firms Monday that they would no longer be allowed to acquire customers by working with big influencers who are not licensed brokers, according to a notice dated Oct. 29.

Investment recommendations via live streaming are also banned, the notice said.

The CSRC said that brokerages’ staff should maintain objectivity and professionalism when commenting on economy and markets via web casts, and refrain from attracting attention by using “sensational wording” or “quirky outfits.”

China has launched an initiative to cultivate a benign online environment to facilitate a “sustainable and healthy development” of the economy and society.

As China fully opened its US$54 trillion financial industry to the global giants, the nation’s more than 130 brokerages have been under mounting pressure to maintain market share and win new businesses.

To gain more clients, major firms, including Huatai Securities Co. and East Money Information Co. as well as smaller brokerages with few outlets, have worked with influencers across social media platforms by paying them fees for traffic flow. (SD-Agencies)