Leo Zhang/Shanghai Daily news

China's securities regulator said yesterday the government will repay investors when brokers go bust and fail to return clients' funds. The move lifted Shanghai shares to a month high.
The Shanghai Composite Index, which tracks yuan-denominated A shares and foreign-currency B shares, advanced 2.62 percent to 1,072.81, the highest close since June 30.
The A-share Index sailed 2.61 percent to 1,128.12 while the B-share Index jumped 4.11 percent at 57.24.
"The news gave much needed assurance to retail investors," said Zhang Li, a Huatai Securities Co analyst. "Sentiment will hopefully recover a bit."
Clients' funds in securities clearing accounts will be fully recovered if a broker they entrust is insolvent and is to be liquidated, according to rules published by the stock market watchdog, the central bank and the Ministry of Finance.
The money to repay brokers' debt will come temporarily from the central government before a protection system on securities investment is set up, the rules said.
China has set aside 10 billion yuan (US$1.23 billion) as part of efforts to form a fund aimed at protecting the interests of stock investors, a central bank official said on July 19.
China Petroleum & Chemical Corp, Asia's biggest oil refiner, soared 5.19 percent to 4.05 yuan.
Huaneng Power International Inc, a unit of China's largest power group, leapt 3.14 percent to 5.92 yuan.