China’s securities regulator moves to strictly restrict short-selling scale
Published: Feb 06, 2024 02:43 PM
China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

China Securities Regulatory Commission (CSRC) in Beijing Photo:VCG

 The China Securities Regulatory Commission (CSRC), the country's top securities regulator, said on Tuesday that it will suspend securities companies' new business involving lending certain shares for short selling in accordance with the law, and will gradually settle the existing business.

The measure is part of recent efforts CSRC rolled out to crack down on illicit market manipulation and stabilize the country's stock market which has embroiled in outsize volatilities lately.

The CSCR also urged securities brokerages to strengthen management on their clients' transactions, and strictly prohibited them to provide securities lending through intra-trading day rotation trading mechanism.

The regulator vowed to scale up the strength of supervision and law enforcement, and will crack down on securities-related law breaking conducts to ensure the smooth operation of securities lending.

On Tuesday morning, the CSRC held a symposium on elevating the investment value of listed companies.

The meeting stressed that listed companies are the "fundamental, cornerstone and top students" of national economy, and the source of value investment in the capital market. The meeting urged listed companies to shoulder its main responsibility to improve investment value, proactively elevate returns on investors, and safeguard market stability and shore up investor confidence.

The regulator has to date released a number of statements in recent days to address various aspects of the securities market. On Monday, CSRS listed several cases of suspected market manipulation and "malicious short selling" and vowed to severely punish those who engage in illegal activities.

According to the CRSC, the balance of securities lending has dropped 24 percent to reach 63.7 billion yuan ($8.86 billion) since relevant mechanism was implemented. The balance only accounts for 0.1 percent of A-share market valuations.

On Tuesday morning, state-owned Central Huijin Investment- deemed as a key player in the "national team"- announced that its plans to increase its holdings of major Exchange-Traded Funds (ETFs), a move aimed at bolstering the stability and healthy operation of the A-share market.