China set to welcome securities lending
18 August 2010 Hong Kong
Image: Shutterstock
It has been revealed that the Chinese regulators are close to approving a broadening of the rules on securities lending in the country, increasing the opportunities for margin lending and short selling.
Margin lending and securities lending products have been permitted in a limited way during a trial period that began at the end of March, and a recent meeting of the regulators discussed whether going forward funds should be involved, when stakeholder meetings may be needed, how to price securities packages and whether capital raised through securities financing should be reinvested.
A new regulatory mechanism is required for securities lending to become a major part of the Chinese markets, and there are a number of back office issues that still need to be resolved. But sources suggest that a system could be in place within six months.
Margin lending and securities lending products have been permitted in a limited way during a trial period that began at the end of March, and a recent meeting of the regulators discussed whether going forward funds should be involved, when stakeholder meetings may be needed, how to price securities packages and whether capital raised through securities financing should be reinvested.
A new regulatory mechanism is required for securities lending to become a major part of the Chinese markets, and there are a number of back office issues that still need to be resolved. But sources suggest that a system could be in place within six months.
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