Broker compensation fund proposed

Hoping to boost investor interest in China's stock markets, financial regulators have put forward a plan to create a compensation fund for investors stung by fraudulent or failed brokers, state media reported. Backed by the central bank, the finance ministry, the China Banking Regulatory Commission and the China Securities Regulatory Commission, the plan calls for a central government-backed fund to protect retail investors' interests and maintain financial and social stability when brokerages and financial institutions collapse. The program would allow investors with cash deposits of up to RMB100,000 (US$12,000) to be fully compensated. Those with more would receive compensation of 90% from the fund, with the remaining 10% the responsibility of the local government.