China Tells Broker Analysts to Watch Their Social Media Conduct
(Bloomberg) -- China’s authorities, grappling with a stock market that lost $2.4 trillion in value last year, have once again taken aim at the behavior of analysts.
The industry was warned in recent weeks about posting research notes on social media, according to people who’ve seen a notice from the securities regulator. The document cited instances such as unauthorized reports being posted and comments sent to clients through the WeChat service, the people said.
Senior Chinese officials have been trying to manage perceptions of the country’s slowing economy and slumping capital markets. The government has talked up prospects and said fundamental conditions remain strong, while agencies including the central bank have adopted policies geared toward boosting growth.
The China Securities Regulatory Commission didn’t respond to a fax seeking comment.
The recent notice said that brokerages should publish their research on designated platforms to ensure fairness, according to the people, who asked not to be named because its contents aren’t public.
Financial analysts in China have come under particular pressure in the past few months. In November, the CSRC asked economists to “strive for higher-level thinking” and consider the country and Communist Party’s interests when publishing research, people familiar with the matter said at the time. In September, analysts were asked in another notice to “prudently” review potentially market-moving comments and “voluntarily” safeguard market stability, according to the people.
Securities firms shouldn’t allow media to make “substantial” changes to material sent to them, and must take immediate action to clarify any wrongful reports, the September notice said, according to the people.
The benchmark Shanghai Composite Index lost 25 percent last year, the worst performance by a major global benchmark. Policy makers also had to contend with a record number of corporate defaults, while the trade war with the U.S. added to the pressure.
Shanghai Securities News, an official publication, reported earlier on Friday that securities regulators had issued rules to tighten supervision over brokerage research reports.
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