China says crackdown on illegal financing will have no significant impact on markets

[HONG KONG] A crackdown in China on grey-market margin financing will not have significant impact on markets, because the level of forced liquidation in the clean up is low, China's securities regulator said on Monday.

China Securities Regulatory Commission (CSRC) punished four of the country's largest brokerages last week for failing to properly verify clients.

That came after Chinese authorities launched a series of investigations into the wild fluctuations in the country's stock markets and a crackdown on alleged "malicious" short-selling or market manipulation.

The overall risk of derived from brokerages using stock as collateral is controllable, the spokesman of CSRC added in an online question and answer statement published on Monday evening.

REUTERS