(Yicai Global) July 7 -- The Securities Association of China, a self-regulated industry body, recently made routine inspections of the securities research report businesses of brokerages two months earlier than in previous years, according to Shanghai Securities News.

The checks looked at 10 key areas such as the setup and personnel composition of the research departments, number of institutional clients covered, commissions from institutional clients served, the number of research reports issued and the number of listed firms covered, the report said today.

Last month, the SAC held training sessions on research reports for securities analysts and quality control and compliance personnel, among others.

One of the main focuses this year for Chinese regulators is the rectification of the research report businesses of brokers.

In May, the China Securities Regulatory Commission made public the results of its on-site inspections of these businesses, and a large number of penalties ensued. In the first half of this year, local regulators handed out a total of 45 fines for research reports produced by 22 brokerages.

Judging from the SAC’s inspection results, the compliance level and professional ability of the research report businesses was generally good, according to the report. But some firms had imperfect corporate systems and mechanisms as well as worse-than-expected execution, while reports written by a few analysts lacked professionalism and prudence.

Editor: Peter Thomas