January 31, 2019 / 10:21 AM / 20 days ago

China improves margin trading, short selling rules

FILE PHOTO - An investor sits in front of a board showing stock information at a brokerage office in Beijing, China, December 7, 2018. REUTERS/Thomas Peter

SHANGHAI/BEIJING (Reuters) - China’s securities regulator said on Thursday it would improve the mechanism for margin trading and short-selling, in efforts to satisfy diversified investment needs.

The China Securities Regulatory Commission (CSRC) also said it would adjust risk-management rules for brokerages, encouraging them to make more long-term equity investments.

CSRC said in a statement that Shanghai and Shenzhen exchanges were studying expansion of the securities eligible for margin trading and short selling. In addition, a uniform threshold for margin calls would also be scrapped.

In a separate statement, CSRC said it would allow brokerages to set aside less provisions for risky assets including main index constituents and exchange-traded funds, allowing them to invest more in equities as part of counter-cyclical measures.

Reporting by Samuel Shen, Brenda Goh and Beijing monitoring team; Editing by Jacqueline Wong

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