THE securities regulator should encourage consolidation in the brokerage industry and allow more private funding, including from overseas, to improve competitiveness in the sector, a research division under the China Securities Regulatory Commission said Friday.

The research division also said in a report that more brokerages needed to become publicly traded either by making initial public offerings or by taking over listed companies, which it said would expand their fundraising channels and increase their operational efficiency.

The report was posted on the Shanghai Stock Exchange’s Web site Friday.

Only eight of the nation’s 106 brokerage companies are listed on local stock exchanges, but an increasing number of them are seeking public listings.

The Caijing magazine reported Friday that IPO applications from four domestic securities companies, Everbright Securities Co., Orient Securities Co., China Merchants Securities and Western Securities, would start to be reviewed this week.

The research division said domestic brokerages, which are mostly small and relatively weak in terms of capital, faced fierce competition from multinational investment banks.

“Brokerages should increase in size through mergers, acquisitions and restructuring,” it said, adding that rules on private-sector participation in the mergers and acquisition of brokerages should be liberalized.

“We should relax restrictions on shareholdings in brokerages, encourage foreign investors to participate in the restructuring of brokerage companies, and make shareholding in brokerage firms more diverse, public and international, “ the research division said. (SD-Agencies)