CHINA: CSRC approves ban on intraday short selling

Wednesday August 5 2015

Following approval by the China Securities Regulatory Commission (CSRC), both the Shanghai and Shenzhen Stock Exchange have modified their implementing rules for margin trading and securities trading to ban traders from borrowing and repaying stocks on the same day.

The Shanghai Stock Exchange has done this by amending Article 15 of the ‘SSE Detailed Rules for Implementation of Margin Trading and Securities Lending (Revised in 2015). The modified article is as follows:

‘Article 15 – after short sale, the client may, starting from the next trading day, repay the financed securities to the member by purchasing securities, or directly repay the securities’.

The Shenzhen Stock Exchange has done this by amending Clause 2.12 in the SZSE Implementing Rules for Margin Trading and Securities Lending (Revised in 2015). In essence, the amendment means that investors are only allowed to repay borrowed securities on the next trading day after selling. Click here for a link to the Shenzhen Stock Exchange.

Both of these amendments make it more difficult for speculators to profit from hourly price changes.

The modified articles shall come into force from 3 August 2015.

Click on the above link for further details.