BEIJING/HONG KONG, April 12 (Reuters) - A top executive

who left investment bank China International Capital Corp ( CNICF )

is set to join sovereign wealth fund CIC to avoid a potential

conflict of interest as his brother heads the securities

regulator, six sources said.

China has long vowed tougher discipline of leaders and

officials, and the latest move comes against the backdrop of

sweeping changes to top regulatory bodies made in recent years

by President Xi Jinping so as to improve supervision.

Wu Bo, most recently the president and CFO of state-owned

CICC, is the younger brother of Wu Qing, who took the

helm of the China Securities Regulatory Commission (CSRC) in

February, said the sources with knowledge of the matter.

The primary watchdog of all brokerages in China, including

CICC and foreign banks' securities ventures, CSRC supervises the

$10.5-trillion stock market and various capital markets

activities.

The sources spoke on condition of anonymity because the

matter is a sensitive one.

The CSRC, CICC, Wu Bo and Wu Qing did not respond to

Reuters' requests for comment. CIC declined to comment.

Headquartered in Beijing, CIC was founded by the central

government in 2007 to help the world's second-largest economy

earn a higher return on foreign exchange reserves, and had total

assets of $1.24 trillion by the end of 2022.

In a filing on Wednesday, CICC said that Wu Bo, who joined

the bank in 2004, had stepped down as president with immediate

effect after less than half a year in the role.

He would also no longer serve as CFO or a member of the

management committee due to "work changes", the bank added,

without giving further details.

China's law on civil servants, which covers the CSRC, bars

public servants who are immediate family members, including

siblings, from working in posts with direct superior and

subordinate relationships.

Preparations for Wu Bo's departure from China's oldest

investment bank started soon after his brother, nicknamed the

"broker butcher", was appointed as the CSRC head in an

unexpected move amid a market rout, three of the sources said.

Wu Bo, 46, is poised to join CICC's parent and top

shareholder China Investment Corp (CIC) to take charge of some

overseas investments that are not overseen by CSRC, they added.

CIC, which is owned by the State Council, or cabinet,

invests overseas through two subsidiaries, CIC International Co

and direct investment vehicle CIC Capital Corp. It also has a

domestic investment unit, China Central Huijin.

Wu Bo's departure from CICC comes as companies scramble to

scuttle plans for initial public offerings in China this year

after the watchdog tightened listing rules in a bearish market,

darkening prospects for investment banks.

In September last year, Wu Bo became the bank's CFO and two

months later, president and its de facto No. 2 executive.

His brother, Wu Qing, was a senior leader in the financial

hub of Shanghai before becoming chairman of the regulator in

February, when China's stock markets were near their weakest in

five years.