The China Securities Regulatory Commission (CSRC) has banned the use of over-the-counter (OTC) derivatives as a financing channel, in a fresh move to restrict risky shadow banking businesses, according to a CSRC notice obtained by Reuters, and confirmed by two sources.
More specifically, brokerages are banned from providing financing to clients using OTC derivatives, and must not facilitate OTC transactions designed to skirt supervision, according to the notice.
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