China Securities Regulatory Commission Strengthens Supervision of Securities Lending
On January 28, the China Securities Regulatory Commission announced that it will be strengthening the supervision of restricted stock lending, optimizing the securities lending mechanism, and fully suspending the lending of restricted stocks. Additionally, the market-based application for securities refinancing will be adjusted from real-time availability to next-day availability.
The Commission stated that a comprehensive suspension of the lending of restricted stocks will be implemented from January 29, and measures to restrict the efficiency of securities lending will be implemented from March 18. The Shanghai and Shenzhen Stock Exchanges also issued a notice suspending strategic investors from lending their allocated stocks within the promised holding period. Lending contracts that have not been settled before the implementation of the notice shall not be extended upon expiration.
Furthermore, in October 2023, the China Securities Regulatory Commission canceled the lending of special asset management plans established by listed company executives and core employees by participating in strategic placements, and restricted the lending methods and proportions of other strategic investors in the early stage of listing.
According to the Commission, the optimization of the securities lending mechanism mainly reflects the regulatory intentions in two aspects: highlighting fairness and reasonableness, and reducing the risk of securities lending, as well as strict supervision to crack down on illegal activities related to securities lending.
The Commission also announced that it will continue to strengthen supervision in order to maintain market order in accordance with the law and protect the legitimate rights and interests of investors.
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