July 16, 2012 / 6:38 AM / 5 years ago

China regulator slashes stock, bond fees to boost confidence

SHANGHAI, July 16 (Reuters) - China slashed transaction fees on stock, bond, mutual fund and futures trading on the Shanghai and Shenzhen stock exchanges on Monday, the second move since April aimed at boosting confidence for the volatile bourses.

China’s Securities Regulatory Commission (CSRC) and the National Development and Reform Commission (NDRC) said that supervisory fees applied to stock trading will be cut to 0.002 percent from 0.004 percent. Futures trading supervisory fees are to be reduced to 0.0001 percent from 0.0002 percent.

The fee applied to mutual fund and bond trades is to be eliminated entirely, the t wo bodies said. (www.csrc.gov.cn)

The fees are collected by both exchanges and the official clearing house. The financial impact is not expected to be significant, but is intended to improve market confidence in a difficult operational environment, brokerage CLSA said in a note to clients.

But the latest fee cuts may not be passed down to clients as many Chinese brokerages continue to struggle, analysts said.

Profits fell 49 percent in 2011, hit by declining trading volumes and a 22 percent drop in the benchmark Shanghai index for the year.

There has been little improvement in 2012. The Shanghai Composite Index has given up almost all of its gains since the start of 2012 during the past month.

The SSEC was down 1.2 percent at midday. (Reporting by Yixin Chen and Pete Sweeney; Editing by Ed Lane)

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