China bans brokerage CEOs from time off, trips

BEIJINGAs 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 (CSRC) 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.

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% 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. — Bloomberg