According to reports, the China Securities Regulatory Commission said today (6 February) that no new businesses could be established to engage in securities re-lending, in which brokerages borrow shares and lend them to clients for short selling, while existing businesses would be wound up.
The CSRC also revealed a ban on lending to investors who sell stocks on the same day of purchase, a loophole used by some brokers to circumnavigate current rules which prevent shares being be bought and sold on the same day of purchase.
What happened to China in 2023?
At the start of this week (5 February), the regulator said it would tighten the scrutiny of margin financing, targeting what it regarded as “market manipulation and malicious shorting selling”.
The MSCI China index has fallen almost 52% since its February 2021 peak, according to data from FE fundinfo.
Read the full article here
