UBS to face penalties

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The Shanghai Stock Exchange will take measures against brokerages including a UBS unit and China International Capital for sell orders that caused stocks to plunge on December 20th, a bourse official said.

Bloomberg reports that UBS Securities, CICC, Guotai Junan Securities and Orient Securities face penalties for failing to exercise professional judgment and diligently review orders in the last minutes of trading from Qualified Foreign Institutional Investor accounts controlled by UBS, Citigroup, HSBC and Martin Currie Investment Management, the Shanghai Securities News reported Monday.

The exchange official, who asked not to be identified because of the bourse’s rules, said steps were planned and confirmed the accuracy of the newspaper’s report, without commenting further.

The trades show how orders near the end of a daily session can cause volatility in Shanghai, one of two markets among the world’s 10 largest that don’t use an auction to set closing prices. China Construction Bank and other stocks plunged as the funds tried to trade as close as possible to the close, the newspaper said. T

To access the complete Bloomberg article hit the link below:

UBS Unit Among China Brokers Facing Penalties for Stock Drop

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