China introduces margin trading and securities lending

If you have any further questions regarding this article please contact Paget Dare Bryan (paget.darebryan@cliffordchance.com),Yang TieCheng (tiecheng.yang@cliffordchance.com) or Wang-Wai Li (wangwai.li@clifford chance.com).

The month of August marks an important development in China’s securities market - China will allow certain selected securities companies on a trial basis to engage in margin trading and securities lending business. Effectively, securities companies will be able to offer margin trading in listed securities to clients and also to lend listed securities to clients for on-sale by those clients, in each case on a collateralised basis. These will provide new trading opportunities to investors who are keen to invest and trade more aggressively and who are prepared to be exposed to greater investment risks.