Update | China’s securities regulator relaxes rules on margin trading; Shanghai and Shenzhen bourses cut fees
Transaction fees in Shanghai and Shenzhen lowered from August 1
China’s securities regulator has relaxed rules on brokerages’ margin trading businesses amid growing concerns about sharp falls in the country’s stock markets, the official Xinhua news agency reported.
China Securities Regulatory Commission late on Wednesday said it would cancel a rule that said investors needed to make additional guarantees if the ratio of capital they borrowed from brokerages reached 130 per cent of warning levels.
Among other amendments that it made in the statement published on its website was that individual investors that held less than 500,000 yuan (US$80,634) of securities assets, which had been a minimum threshold for margin trading, could continue trading.
China’s two major stock exchanges plan to lower securities transaction fees by 30 per cent from August, as part of the government’s attempt to avert a crash in the world’s most volatile stock market.
The Shanghai and Shenzhen stock exchanges will lower the transaction fees to 0.00487 per cent from 0.00696 per cent of transaction volume for A-share trading, the bourses said in separate statements on Wednesday.
In addition, the China Securities Depository and Clearing Company also said in a statement it would cut transfer fees to 0.002 per cent of transaction volume from 0.03 per cent and 0.00255 per cent for the Shanghai and Shenzhen exchanges respectively.
The cuts will take effect on August 1, the exchanges and clearing company said.
China’s equity markets have declined by more than 20 per cent since their peak in mid-June, prompting the government to unveil a series of market-supporting measures, such as cutting interest rates and unveiling rules to allow state pension funds to purchase stocks.
