The securities regulator has issued a notice limiting the business scope of five small loss-making brokerages in the latest step to shore up the country's beleaguered brokerage sector. All five had misused client funds entrusted for the purchase of government bonds.

From April 1, they would be barred from expanding their business operations or opening new trading accounts, the China Securities Regulatory Commission said on its Website. The aim is to make the firms focus on improving internal controls by a set time so client funds are not misused in future.

The five brokerages are Zhejiang Province's Tianhe Securities, Jiangsu's CIFCO Securities, China Lions Securities in Guangdong, Capital-Bridge Securities in Shaanxi and Aviation Securities in Beijing, the regulator said.

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