Tags: china | securities regulator | margin lending | stocks

China's CSRC Defends Actions After Stocks Sink Most in Six Years

Monday, 19 Jan 2015 04:21 PM

China’s securities regulator said it isn’t trying to curb equity trading after its efforts to rein in record margin lending spurred the biggest drop in the nation’s stocks in six years.

Investors’ interpretation that regulators are suppressing the stock market through Friday’s action isn’t accurate, China Securities Regulatory Commission spokesman Deng Ge said, according to a statement on the regulator’s website.

The Shanghai Composite Index sank 7.7 percent on Monday after the CSRC last week suspended three brokerages from loaning money to new equity-trading clients and said brokers shouldn’t lend to investors with assets below 500,000 yuan ($80,380).

The regulator took action “to protect investors’ rights and support the healthy growth of margin trading,” Deng said, according to the statement.

Investors with less than 500,000 yuan in their margin- trading account will not be forced to sell their positions, Deng said. Instead, brokers should strengthen risk evaluation and education for such investors.

Outstanding margin loans used to buy shares on China’s exchanges surged to 1.1 trillion yuan ($177 billion) as of Jan. 16 from about 400 billion yuan at the end of June.

“Brokerages’ businesses in margin trading are going smoothly and the overall risk is controllable,” based on a regular inspection led by the CSRC, Deng said.


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China's securities regulator said it isn't trying to curb equity trading after its efforts to rein in record margin lending spurred the biggest drop in the nation's stocks in six years.
china, securities regulator, margin lending, stocks
208
2015-21-19
Monday, 19 Jan 2015 04:21 PM
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