Money

14 more brokerages OK'd for margin trading

By Hao Yan (chinadaily.com.cn)
Updated: 2010-11-25 13:19

The China Securities Regulatory Commission (CSRC) on Wednesday approved 14 more brokerages to participate in a pilot margin-trading and short-selling business, adding up to a total of 25, Securities Daily reported Thursday.

Although the third batch of companies was approved for the pilot program, the 14 brokerages still must pass all reviews by Shanghai and Shenzhen stock exchanges.

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The 14 brokerages are expected to begin the program in December, the newspaper reported, citing anonymous sources.

After the expansion, the program will cover more than 2,200 offices of securities companies, accounting for more than 53 percent of the country's total 4,198 offices, Nie Qingping, director of margin trading and short selling at CSRC, said earlier.

Margin trading allows investors to use borrowed money from securities companies to buy shares, and short selling allows them to sell borrowed stocks from securities companies in the hope of buying them back later at a lower price to profit from the share decline.