Everbright Securities under scrutiny

Everbright Securities Co said Wednesday afternoon that it received a notice from China's National Association of Financial Market Institutional Investors, which urged the brokerage to launch a self-investigation due to two major errors it made on Friday and Monday.

The Shanghai-based brokerage caused a wild swing in Shanghai Composite Index Friday because its ill-designed trading system created 26,082 orders and sent them to the Shanghai Stock Exchange. On Monday, the brokerage mistakenly sold 10-year government bonds with a face value of 10 million yuan at very low prices.

The association said the trading errors exposed Everbright Securities' deficiencies in aspects such as internal control, compliance and risk management. The company's primary underwriting business for bond fundraising by non-financial companies will be halted, Everbright Securities said.

And the company will have to launch a self-investigation into fields including the process of its underwriting business and its electronic systems.

Everbright Securities was as well asked to hand in the results of the probe and improvement plans to the association by August 30.