23 January 2019

CSRC affirms ban on naked shorting in margin trading, paper says

The China Securities Regulatory Commission (CSRC) said Wednesday that the operating mechanism and legal framework for securities margin trading, which has been in force for over three years, are now functioning well and that investors’ rights are under proper protection, Securities Times reported Friday. At present, up to 700 stocks are available for securities margin trading, with 400 from the Shanghai Stock Exchange and 300 from the Shenzhen bourse. Meanwhile, the watchdog reiterated that naked short-selling in margin trading is strictly prohibited. Other measures being taken to control risk include implementation of short-selling price rules, limitation on the scale of margin trading, and daily disclosure of margin trading information, the report said. Naked short-selling refers to the practice in which an investor sells a stock he does not possess or cannot borrow. 

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