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Margin financing, securities lending on the table

By Xu Shenglan (chinadaily.com.cn)
Updated: 2008-10-13 18:03

Trials of margin financing and securities lending businesses may go ahead as early as December among no more than eight securities brokers, according to a Securities Times report.

The securities watchdog recently gathered 11 securities brokers to discuss trial operations in margin financing and securities lending businesses, the report said. The 11 brokers are CITIC Securities, Guosen Securities, China Merchants Securities, China Galaxy Securities, Huatai Securities, Guangfa Securities, Guotai Junan Securities, Shenyin & Wanguo Securities, Everbright Securities, Orient Securities, and Haitong Securities.

However, not all of the 11 securities brokers will appear in the final list of trial operating brokers. The number of pilot brokers will be no more than eight, according to the report.

The eleven pilot operation plans submitted by the brokers will be judged to determine the the final eight. Besides the brokers' operating performance and net capital status in the last 6 months, the securities watchdog will focus on how the broker will educate and select investors, as well as its risk control and staff training, the report quoted sources as saying.

In addition, the 11 securities brokers, together with China Securities Depository and Clearing Corp Ltd and Shanghai and Shenzhen securities exchanges, will carry out tests on the trial businesses twice, on October 25 and November 8 respectively.

The trials will end before December, and margin financing and securities lending services will be available in the securities market as soon as possible afterwards. Several brokers of the 11 participating said that not only big players but also qualified small and medium investors could access the coming margin financing and securities lending services.