China’s top securities regulator suspends restricted share lending
China’s top securities regulator on Sunday announced it will suspend lending of restricted stocks to strengthen the supervision of short-selling, a move that will take effect on Monday, in the latest measure to stabilize the stock market.
In addition, the China Securities Regulatory Commission (CSRC) said that it will limit the efficiency of some securities lending in the securities refinancing market from March 18.
Securities finance firms that borrow shares from institutional investors will need to wait one day before providing them to brokerages instead of the stock being immediately available.
Observers said that the adjustments focus on responding to investors’ concerns about the corresponding issues, and will improve the margin trading and short-selling mechanisms, which fully reflects an investor-centric approach.
The moves aim to create a fairer market order by restricting institutions from taking advantage of utilizing information and tools, and allowing investors to have sufficient time to process market information, read the statement.
It added that the moves will focus on strict supervision by strengthening the oversight of securities financing for restricted shares, while resolutely cracking down on illegal behavior.
The adjustments will help boost the market’s confidence as the supervision is implemented by prioritizing investors, Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times.
The measures will also optimize the current mechanism. It is not fair if institutions have more ways to trade and more information to trade with than individual investors, who account for a relatively large proportion of the market, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at the Renmin University, told the Global Times on Sunday.
The CSRC has set priorities for its work this year, with protecting investors, enhancing the quality of listed companies and improving market stability high on its agenda, according to the Xinhua News Agency.