On July 10th, the China Securities Regulatory Commission (CSRC) announced that in order to effectively respond to investors' concerns and maintain stable market operation, after fully evaluating the current market situation, the CSRC has approved the application of China Securities Finance Corporation to suspend its securities lending business in accordance with the law, which will be implemented from July 11, 2024. The stock to securities lending contract can be extended, but it must be settled no later than September 30th. At the same time, it is approved that the stock exchange will increase the margin ratio for securities lending from no less than 80% to 100%, and the margin ratio for private securities investment funds participating in securities lending will be increased from no less than 100% to 120%, effective from July 22, 2024. Starting from the actual needs of the development and centralized supervision of the domestic securities market, China established a refinancing system around 2013, which provides necessary funds and securities sources for margin trading and securities lending; On the other hand, it also provides a means for regulatory authorities to grasp the business development situation, strengthen daily supervision, and take timely countercyclical adjustment measures. Since August 2023, the China Securities Regulatory Commission has taken a series of measures to strengthen the supervision of securities lending and securities transfer business based on market conditions and investor concerns. As of the end of June 2024, the cumulative scale of securities lending and securities transfer has decreased by 64% and 75%. The scale of securities lending accounts for about 0.05% of the circulating market value of A-shares, and the proportion of daily securities lending sales to A-share transaction volume has decreased from 0.7% to 0.2%. The impact on the market has significantly weakened, creating conditions for the suspension of securities lending business. This adjustment has clearly defined the legal extension and separation arrangements for existing businesses, which helps to prevent business risks and maintain the stable and orderly operation of the market. The China Securities Regulatory Commission stated that in the next step, it will thoroughly implement the "Several Opinions of the State Council on Strengthening Supervision, Preventing Risks, and Promoting High quality Development of the Capital Market", adhere to problem oriented and goal oriented approaches, and always prioritize maintaining institutional fairness and enhancing market stability. At the same time, based on market conditions, we will strengthen daily supervision and countercyclical adjustment, crack down severely on illegal and irregular activities such as improper arbitrage, ensure the stable operation of the market, and effectively safeguard the interests of investors. (Lai Xin She)
Edit：Lubaikang Responsible editor：Chenze
Source：cs.com.cn
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