China's securities regulator downgraded more than half ofthe country's brokerages in its annual review, the South China Morning Post reported July 15.
The China Securities Regulatory Commission ranks companies infive categories from A to E. Companies in the A to C categories imply they havenormal operations while those in the D and E categories indicate alarminglevels of risk.
CITICSecurities Co. Ltd., Haitong Securities Co. Ltd. and were amongthe firms downgraded to BBB from AA. The firms are being investigated forviolating laws and regulations, the CSRC said.
The rating reflects a company's condition in compliancemanagement and is not an assessment of its assets and credibility, according toa CSRC spokesman.
The firms that were ranked lower will likely receive morescrutiny from regulators during their operations in 2017, said one brokerageanalyst. Further, they will also face challenges in establishing new businesses.