Today, the securities industry was rocked by major news—a bombshell was dropped when the CSRC head Wu Qing delivered some tough remarks at an industry conference, signaling that the entire brokerage sector is about to undergo a fundamental transformation.

Simply put: the old ways of price wars and discount competition are completely outdated. From now on, the focus will be on real strength—what tangible value you can actually bring to your clients.

Let’s break down the signals from this speech.

**Segmented Competition: Big and Small Firms Shouldn’t Crowd the Same Track**

For the major brokerage giants, the regulatory intent is clear: integrate your resources and strive to become world-class investment banks, setting a benchmark that can stand out in the global market. As for small and mid-sized brokers? Stop trying to go head-to-head with the big players. Find your niche—maybe it’s investment banking services in a specific industry, or deep coverage in a particular region. Become a "small but beautiful" specialist.

It’s like running a restaurant—some go for chain expansion, others focus on boutique cuisine, and each finds their own way.

**Regulation Revamp: Good Students Get Scholarships**

Going forward, well-managed, reputable brokers will get real benefits from regulators—relaxed capital constraints and higher leverage limits. In plain language, you’ll be given more ammunition to flexibly expand your business.

Small and foreign brokers don’t need to panic either—there will be special, differentiated policies to help you carve out your own unique path. Of course, problematic institutions will still be dealt with—there’s no compromise on that.

**Core Mission Has Changed: Stop Chasing Quick Profits**

Brokerages now need to focus on serving the real economy, strengthening their research and risk management fundamentals. Especially in wealth management, you must provide truly useful investment solutions tailored to different client needs, and grow together with your clients—instead of just looking to cash in on them.

**What Does This Mean for Regular Investors?**

Top-rated, well-capitalized brokerages have effectively received a policy windfall. They’ll be able to allocate funds more flexibly, expand their business footprint, and are likely to see a significant boost in profitability. Stocks of these firms are worth watching closely.

Some small and mid-sized brokers with niche expertise—like STAR Market investment banking, high-net-worth client services, or fintech—are actually entering their prime. No longer having to compete head-on with giants, they can focus on honing their specialties, which could bring positive surprises to their share prices.

The entire industry is shifting from price wars to value creation, which is a substantial positive for improving brokers’ profitability. In the long run, it’s good for healthy industry development and means investors need to rethink their logic when investing in brokerage stocks.

Wu Qing’s speech marks the end of an era for the brokerage industry. The days of wild expansion and homogeneous competition are over. What’s next is differentiated development and a new phase where professionalism wins. For those trading brokerage stocks, it’s time to change your approach.