SHANGHAI, May 9 (Reuters) - China's securities watchdog has launched a nation-wide inspection on brokerages' asset management business, sources said on Tuesday, the latest move in China's regulatory crackdown of risky investments and shadow banking.
Brokerages, along with trust firms and fund houses, have been used by banks as a channel to guide deposits into risky investments and skirt capital rules, helping boost the size of China's shadow banking to nearly $10 trillion, according to Moody's estimate.
The China Securities Regulatory Commission (CSRC) on Monday held meetings with executives in charge of brokerages' asset management business, urging them to take corrective action if products were launched in violations of rules, according to three sources familiar with the meetings.
CSRC declined to comment.
Separately, CSRC's Shenzhen branch recently issued notices urging brokerages to strictly control the size and investment scope of their asset management business.
The CSRC's move comes as China's banking and insurance regulators have also launched crackdown on risky investments, as Beijing steps up efforts to ward off risks and reduce leverage in the financial system ahead of a key Communist Party congress in the second half of the year. ($1 = 6.9051 Chinese yuan renminbi) (Reporting by Shanghai newsroom; Editing by Shri Navaratnam)