The Securities Association of China (SAC) is currently seeking industry feedback on new guidelines for integrated client account management, according to brokerage sources on August 31.

This initiative aims to refine the account management functions of securities firms, standardise how integrated client accounts are handled, and elevate the overall standard of wealth management services offered by brokerages.

The move also signals a significant step forward, transitioning the pilot programme for integrated client account management in the securities sector toward full-scale, routine implementation.

Where the transition begins

Back in 2021, the China Securities Regulatory Commission launched a pilot scheme to optimise account management functions at securities companies. The programme guided participating firms to overhaul their existing account management models across three key areas: establishing integrated client accounts, supporting transfers between same-name accounts, and implementing tiered account management.

To date, 21 securities firms have obtained pilot qualifications. After more than four years of pilot operations, the overall business has been running smoothly, with a solid foundation of experience accumulated along the way.

Setting the threshold for same-name transfers

An integrated client account is defined in the draft guidelines as an account established by a securities firm for its client, based on unified identity verification. It is used to link and manage various accounts held under the client's name, including capital accounts and securities accounts, and to support the provision of related integrated account services.

Regarding the conditions for activation, the draft stipulates that clients requesting same-name capital transfer services must meet basic requirements: their capital account must be in normal status, they must have no record of breach of trust in the securities or futures markets, and they must not appear on the key monitoring lists of exchanges or securities registration and clearing institutions. Additionally, at least one of the following conditions must be satisfied:

First, the client has already opened a margin trading capital account. Second, the client has opened a stock options capital account. Third, the client's ordinary capital account has been open for at least three months, with a securities trading history of no less than six months, and an average daily asset balance of no less than 500,000 yuan over the 20 trading days preceding activation.

The draft also clarifies that accounts signed up for same-name capital transfer services are limited to client capital accounts within the monitoring system's scope. For clients who have already activated the multi-bank depository service for a single client, the signed account is their primary capital account.

In terms of transfer rules, same-name capital transfers are only permitted between signed accounts. The service window is generally set from 9:00 to 16:00, though securities firms may adjust specific service hours based on their own circumstances. Funds transferred in on the same day can be used for trading or withdrawal immediately.

Strengthening risk controls and reinforcing brokerage accountability

The draft guidelines are rooted in pilot experience while also taking broad applicability into account. Based on a comprehensive review of the practical experiences of the 21 pilot brokerages, the guidelines reconcile operational differences across the industry while further standardising service requirements such as same-name capital transfers and tiered account management. The goal is to help the industry achieve a unified understanding, unified execution, and a consistent client experience.

At the same time, the draft preserves reasonable flexibility for service diversity beyond the baseline requirements, accommodating the realities of securities firms of varying sizes and business structures.

On the risk control front, the drafting process adhered to a risk-oriented principle with an emphasis on full-process oversight. A comprehensive risk management mechanism covering pre-event, during-event, and post-event controls has been established, with particular focus on strengthening the pre-event and during-event phases.

Pre-event controls clarify the entry requirements for same-name capital transfer services, moderately raising the admission bar to prevent money laundering and fraud risks at the source. During-event controls strengthen the ongoing management of integrated accounts, with enhanced monitoring and management of money laundering and irregular trading activities. Post-event controls standardise complaint handling, periodic reporting, and major incident reporting mechanisms, placing firm responsibility squarely on the securities companies.

With respect to capital transfer controls, securities firms are required to implement measures such as limiting transfer amounts or frequency to tighten management of client capital movements. They are also expected to establish robust intraday operational monitoring, reconciliation, and discrepancy resolution mechanisms to safeguard the security and integrity of client funds.

Furthermore, the draft calls for reinforced internal control responsibilities at securities firms. This includes three key areas: first, establishing and refining comprehensive account management systems, along with risk monitoring and early warning mechanisms; second, setting up abnormal monitoring indicators specific to same-name capital transfers to strengthen detection of unusual behaviour, promptly identify and analyse such activity, and handle and report it in accordance with regulations; and third, imposing standard requirements across information systems development, emergency management, investor data protection, complaint management, and internal supervision and auditing.