Regulator tightens screws on securities firms

The nation's capital market regulator has launched a new round of inspections into the margin trading business of securities firms in a bid to contain risks in leveraged stock speculation.

Tightened regulations reflect the regulator's fear that risks in the Chinese stock market are building up and could even spill over to the country's banking system as securities firms have borrowed capital from other financial institutions to engage in margin lending.

The inspection will be carried out on 46 brokerages after the regulator punished and warned a slew of securities firms for violating margin trading rules in the initial round of investigation.