The China Securities Regulatory Commission (CSRC) issued a circular yesterday which requires all securities houses and trust firms to report their brokering balance sheets before the end of the month.

The companies are required to give detailed information on their income and expenses from brokering over the past three years.

They are also asked to specify daily operation expenses, employee welfare payments and maintenance fees, as well as the number of employees and the number of new accounts opened each year.

Companies providing false information will be punished.

Analysts said the move to provide better supervision of brokerages was to restore confidence in the market.

A series of trading irregularities, which began late last year, have rocked the sector.

In a separate announcement, the CSRC says it will require securities companies seeking a public listing to add a regulators' position paper to their application documents.

The paper, to be issued by the CSRC, should give an objective description of the problems discovered by the commission regarding information disclosure, risk management and the operation of the firm.

The paper should record any trading irregularities involving the company or its senior executives over the past three years.

The document should also include the financial status of the company, the liquidity of its assets and its debt ratio.

Securities firms which have major irregularities will be required to conduct internal reforms before qualifying for listing.

(China Daily 03/20/2001)