China`s biggest brokerage Citic in $166bn error
November 25, 2015, 1:17 pm   

China`s biggest brokerage, Citic Securities, overstated its derivative business by $166bn (£110bn) from April to September, according to the country`s securities association.

The Securities Association of China said the firm inaccurately inflated the amount of its equity swap transactions in a report submitted in October.

Citic said the error occurred due to a system upgrade and has been corrected.

Probes have resulted in executives confessing to insider trading at Citic.

In September, shares of China`s largest state-owned brokerage slumped after it reported that three executives, including its president, were under police investigation.

The firm has been part of a crackdown by China`s regulators on irregular stock trading since mainland markets plunged dramatically in mid-June.

Shares dip

The securities association, which is partly overseen by the China Securities Regulatory Commission, said it was investigating Citic`s overstatement and would take further action if necessary.

It did add that the error did not affect the month-end net size of Citic`s business.

The brokerage told the Reuters news agency that it had amended the figures at the start of November and the size of its swaps business was $6.2bn.

An equity swap is a type of derivative that refers to a cash exchange between realized gains on specific stocks and fixed interest rates over a certain period of time in the future.

Shares of Citic Securities fell 0.7% in Shanghai.



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