BEIJING, March 20 -- The securities regulator issued a draft rule on securities registration and clearing, as part of efforts to prevent brokerages misusing their clients' investments.

    Investors can now open securities accounts at securities clearing houses directly, according to the rule published on the China Securities Regulatory Commission Web site.

    That will enable investors to check their accounts any time they want, helping to prevent misuse by securities companies, according to a separate report in the Shanghai Securities News on Friday.

    Currently, investors can only open securities accounts at securities clearing houses through securities companies. But securities companies often open a combined account for a group of investors and for proprietary trading, which has allowed the misuse of clients' securities, analysts said.

    The China Securities Depository & Clearing Corp., the central securities clearing house, should organize securities companies to set up a "mutual assurance fund" to control the risks in the clearing system, the draft rule said.

    The fund would be used to ensure the completion of securities transactions when a party defaults, it said.

    The central securities clearing house should issue detailed rules on fund-raising for the fund, its management and uses, the draft rule said.

    Unconfirmed debts owed by securities companies to the central clearing house amounted to more than 100 billion yuan (US$12.35 billion) and have put the clearing house at risk of going bankrupt, the Caijing magazine reported last June.

(Source: Shenzhen Daily/Agencies)