Under new rules promulgated by the market regulators and due to come into effect on May 1, brokerages will be able to set their own stock trading commissions, subject to a cap of 0.03 per cent, Reuters reported. In addition there will be a minimum fee of Yn5 per A-share trade, US$1 per trade for Shanghai- listed B shares and HK$5 per trade for Shenzhen-listed B shares. Broking fees for trading of government and corporate bonds and other new products would be set by the stock exchanges. The new system replaces the previous one of government-set brokerage fees of 0.35 per cent for A shares and 0.43 per cent for B shares.
The new rules reducing trading costs are expected to boost turnover in the market and support share prices but they may cause smaller brokerages to leave the industry, which is already facing financial problems. Industry sources say that income at most brokerages has dropped as the combined turnover of share and fund trading on the Shanghai and Shenzhen stock exchanges fell by about one-third last year.