Stock market regulator asks banks to stop feeding brokerages

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The State Securities Commission has asked local commercial banks to stop pumping capital into their stock brokerage offshoots to avoid putting the financial market at risk.

There have been excessive capital injections into securities firms from their parent banks and the money should be withdrawn, local news website VnExpress reported Monday, citing Nguyen Doan Hung, vice chairman of the stock regulating agency. Even though Hung did not provide specific figures, he said the largest and riskiest money injection was found at Agribank Securities JSC.

"Securities firms have a total equity of around VND36 trillion and assets worth some VND100 trillion"¦ so moving capital around without supervision will be very risky," Hung said.

The Securities Commission has imposed special supervisory measures on seven securities firms due to their chancy financial practices.

Agribank Securities JSC, also known as Agriseco, ranked ninth among the top 10 stock brokerages in the second quarter with a market share of 3.62 percent. Ho Chi Minh City Securities led the market with an 11.47 percent share, followed by Saigon Securities Inc. and ACB Securities, according to statistics from market regulators.

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