China is reportedly planning to allow brokerages and securities investment advisers to expand their wealth management business.
Brokerages and securities investment advisers are currently allowed only offer consulting services, but only investors can make the decision to buy or sell assets.
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The decision aligns with the series of steps taken by the country to liberalise its finance sector.
The new regulations, drafted by the Securities Association of China, will allow qualified consultants to step into the shoes of investors and invest or trade in shares, funds or futures on their behalf, Reuters reported citing three sources with direct knowledge of the matter.
The proposed rules will lay out certain conditions to trade including the need for an appraisal of investor appetite for risk and the requirement to match that with appropriate asset allocation, reducing risk, the report said.
The regulations will also call for good risk disclosure, good account security management to prevent the transfer of assets, while prohibiting misrepresentative marketing.
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