China's securities regulator has punished six brokerages, including Great Wall Securities Co Ltd and Huatai Securities Co Ltd, for violating rules in their margin trading businesses, a spokesman for the watchdog has said.

The sanctions follow an investigation into the margin trading business of 46 brokerages, launched earlier this year by the China Securities Regulatory Commission (CSRC) that spooked investors and dragged down the market.

In January, the CSRC had banned three top brokerages — CITIC Securities Co Ltd, Haitong Securities Co Ltd and Guotai Junan Securities — from opening new margin trading accounts for clients for three months.

Great Wall had broken the regulations including selling products to unqualified investors, CSRC spokesman Zhang Xiaojun had said at a briefing on Friday. He said the firm would be banned from opening new margin trading accounts for three months.

Zhang said Huatai Securities must rectify its processes and toughen oversight after it sold products to unqualified and higher-risk clients, while Guosen Securities Co Ltd should increase internal compliance checks.

Great Wall and Huatai could not be reached immediately for comment about the CSRC’s sanctions on Saturday.

The other brokerages sanctioned included Minmetal Securities Co Ltd, Huaxi Securities and China International Capital Corp.

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