The China Securities Regulatory Commission (CSRC) has announced a complete suspension of the lending of restricted shares starting Monday, as part of efforts to stabilize the stock markets amid recent sharp declines, Reuters reports.
Restricted shares, often subject to certain sale limits, can be lent for trading purposes like short-selling, adding pressure during market slumps. The move aims to enhance fairness, reduce lending efficiency, limit institutional advantages, and allow investors more time to process market information.
The CSRC emphasizes cracking down on illegal activities using securities lending to reduce holdings and cash out. The regulator also plans to limit the efficiency of some securities lending in the securities refinancing market from March 18.
The move is part of Beijing’s efforts to boost market confidence after supportive policies and a bank reserve cut helped recover stocks from 5-year lows. China’s stock market has faced challenges to revive confidence and stabilize the economy. While the market has recovered slightly, it remains down about 3% year-to-date.
