The China Securities Regulatory Commission (CSRC) announced that applications for securities relending, a tool used for short-selling, would be suspended, in another step to stabilize the capital market.
In response, the Pan Asia Securities Lending Association (PASLA) said in emailed commentary: “The CSRC has removed any remaining equity leverage from the margin trading market and taken further action to reduce securities lending capacity from the equity market, describing this as a counter-cyclical measure. The CSRC detailed that securities lending activity accounts for approx. 0.20% relative to the total A Share traded volumes as of June 2024.”
“PASLA expects this to be a temporary measure. We encourage the CSRC and policymakers to engage with our membership as they adapt the market structure, and we will continue to support efforts to ensure that securities firms educate all categories of investors about appropriate market behaviors and business practices.”