In a recent response to a reporter’s question on the implementation of the new securities lending regulations, the head of the relevant department of the China Securities Regulatory Commission (CSRC) clarified the commission’s stance on the matter.
The Shanghai and Shenzhen Stock Exchanges issued a notice on October 14, titled “Notice on Optimizing Arrangements for Securities Lending Transactions and Refinancing Securities Lending Transactions,” which outlined specific restrictions on securities lending for certain types of shares. The notice stated that investors holding restricted shares, strategic allotment shares of listed companies, and shares with transfer restrictions are not allowed to sell stocks of the listed company by borrowing money during the restriction period.
Following the release of the new regulations, regulatory authorities and industry associations have urged securities companies to implement the requirements through various methods, such as issuing notices, on-site inspections, and industry training.
Securities companies have been instructed to inform investors of the new regulatory requirements and improve their systems and business management and control in a timely manner. While most securities companies have implemented the requirements of the new regulations, on-site inspections revealed that some companies have shortcomings in their verification of related parties.
In the next steps, the China Securities Regulatory Commission will comprehensively strengthen penetrating supervision in accordance with the requirements of the Central Financial Work Conference. This will involve consolidating the responsibilities of securities companies to ensure strict compliance with the regulations and strengthening supervision and law enforcement to crack down on violations.