Chinese officials are preparing a stress test for the brokerage industry later in the year to guard against a possible decline in economic or market conditions, Reuters reported, citing three unnamed sources. The China Securities Regulatory Commission (CSRC) has already asked some securities firms, such as China International Capital Corporation (CICC), to launch pilot tests. The tests include calculating the impact of a sharp fall in mainland equity markets or a sudden liquidity crisis. China’s brokerage industry is fragmented, and some analysts fear that securities firms in smaller cities may not have the resources to cope with a sudden economic shock. “The importance of stress tests is rising as Chinese brokerages are conducting more and more innovative businesses such as index futures,” said Liang Jing, an analyst at Guotai Junan Securities.