China to Ban Derivatives Funding for Stock Trades, CSRC Says
- Some swaps deviate from risk management function, CSRC says
- China's two exchanges doubled margin requirements for stocks
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The Securities Association of China will ban brokerages from offering financing for stock market trading using derivatives, the country’s securities regulator said.
Brokerages should provide funding to their clients using margin trading tools that comply with the rules, China Securities Regulatory Commission spokesman Zhang Xiaojun said Friday at a briefing. Swaps offered by some brokerages have deviated from their role as a risk management tool, instead becoming a way to offer unofficial margin loans for investors, Zhang said.