Upon approval by the China Securities Regulatory Commission, the Shanghai Stock Exchange (SSE) has modified Article 15 of the “SSE Detailed Rules for Implementation of Margin Trading and Securities Lending (Revised in 2015)”, in a bid to cement risk management on the business of margin trading and securities lending, propel standardized growth of the business and maintain normal order of the market. The modified article is as follows:
“Article 15 After short sale, the client may, starting from the next trading day, repay the financed securities to the member by purchasing securities, or directly repay the securities.
Repaying securities by purchasing securities refers to the way that the client applies for purchasing securities through its credit securities account, and the securities purchased are directly transferred to the member’s securities account for securities lending in the settlement.
For the way of directly repaying the financed securities, it will be subject to the agreement between the member and the client as well as the relevant regulations of the depository and clearing institution designated by the SSE.
If trading suspension is imposed on the securities of the client’s short sale, the client may, according to the agreement, repay the financed securities to the member in cash or in other ways.”
The modified article shall come into force since the date of promulgation.