China Imposes Stricter Measures on Short-Selling to Stabilize Stock Market

China's securities regulator announces new restrictions on short-selling and tighter scrutiny of high-frequency trading to stabilize a declining stock market. These measures include suspending securities re-lending and raising margin requirements for short-sellers. The latest actions aim to boost market sentiment amid economic concerns.

China's securities regulator on Wednesday unveiled new restrictions on short-selling and committed to stricter monitoring of computer-driven trading programs. This move is part of its latest efforts to support a weakening stock market.

Regulators and investors in China often blame short-selling, which involves selling borrowed shares, for worsening market declines. In response, the China Securities Regulatory Commission (CSRC) announced the suspension of securities re-lending, where brokers borrow shares for clients to short sell. Additionally, margin requirements for short-sellers will be increased.

The CSRC has also called on stock exchanges to detail rules governing program trading, especially high-frequency trading. These new measures follow a seven-week losing streak for China's blue-chip CSI300 index amid economic concerns. According to the CSRC, these steps are meant to address investor concerns and stabilize the market.