Foreign investors were given the chance to short-sell certain Shanghai-listed A shares for the first time through Stock Connect from March 2. But only exchange participants (EPs) can lend stocks to their clients under the scheme, which some believe is stifling the potential of the short-selling project.
“Under the current rules, only exchange participants are permitted to lend stocks, and they are brokers,” says Nick Ronalds, managing director and head of equities at the Asia Securities Industry and Financial Markets Association (Asifma). “The brokers do not have the inventory, and if you do not have the product, you can’t lend.”
The full article is available here: http://www.euromoney.com/Article/3441958/Category/6/ChannelPage/8959/Stock-Connect-China-shorting-plan-needs-more-lenders.html