China regulator seeks to cap margin trading, short selling

Beijing

CHINA'S securities regulator, seeking to contain risks in the country's highly leveraged stock market, on Friday released draft rules that cap a brokerage's margin trading and short selling business at four times its net capital.

At present, there is no ceiling on how much margin financing a Chinese brokerage can extend.

The China Securities Regulatory Commission (CSRC) said the draft management rules for share-financing were being published for public comment.

Earlier on Friday, the regulator told brokerages again to make sure they don't help "facilitate" illicit loans t…