Is a dance of two steps forward, one step back, China’s securities regulator lifted one of the measures it instituted to halt the summer’s stock market crash.

The China Securities Regulatory Commission (CSRC) said brokerages would no longer be required each day to buy more shares than they sell for any proprietary trading.

At the same time, the regulators, opened anti-corruption probes into two of China’s largest brokerages and censured four insurance executives, reported Reuters.

Chinese stock punters

The initial restriction for the brokers and the new probes are part of the crackdown to remove manipulation from the stock market, which saw the Shanghai Stock Exchange Composite Index plunge 40% during the summer market rout. With the benchmark index recovering about 30% of its losses from its August low, the regulator felt confident that the markets had stabilized enough to ease restrictions on proprietary trading.

“In some ways it’s a positive factor – it shows that the CSRC has concluded that the market has basically returned to normal,” said Du Changchun, an analyst at Northeast Securities in Shanghai told Reuters.

The lifting of the ban provides an opportunity to sell off some loss making positions, but Du suggested there would be no rush to sell given the market was rising.

“I’m not too worried about big selling under current conditions,” Du said.

The measure restricting how brokerages trade was originally put in place in July as authorities scrambled with a flurry of measures to stop the stock market slump from turning into a full-blown crash.

The measure is the second major sanction lifted off the market. On Nov. 6, the CSRC announced it would allow initial public offerings to return to the market, after a being halted in July. On Nov. 20, the first IPOs began trading.

On Tuesday, the Shanghai Composite inched up 0.2% to 3,616, the Shenzhen Stock Exchange Composite Index gained 1.4% to 2,300, the smallcap Chinex Price Index rose 1.6% to 2,816 and Hong Kong’s Hang Seng Index slipped 0.4% to 22,588.

Yet, even as it removes restrictions, regulators continue to crackdown on trading irregularities that were partly blamed for the share market rout, said Reuters.

Much like O.J. Simpson spent years after his murder trial searching for the “real” killer of his wife, the Chinese authorities have been accused of chasing ghosts in an effort to find the real culprits behind the crash the authorities actually had a hand in causing.

The Central Commission for Discipline Inspection said four executives at state-owned People’s Insurance Company of China (PICC), one of the country’s largest insurers, had been punished for a wide range of misdemeanors, including using trade union money to fund shopping sprees.

But to give credence to the idea there might have been some real wrongdoing, Reuters reported that China’s asset management association said it had failed to contact 12 domestic hedge fund companies. They were unreachable by phone, email and messaging, the Asset Management Association of China (AMAC) said in a rare notice. The implication is that individuals tied to these firms had cut and run in the face of a widening official probe.

Guotai Junan International Holding), a Hong Kong subsidiary of China’s state-owned Guotai Junan Securities, said on Monday it had been unable to reach its chairman since last week.

On Tuesday, the Xinhua news agency cited a government paper to reporting that investigators in Shanghai had started a probe into Guotai Junan Securities and Haitong Securities.

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