China Watchdog Embraces Risk After Everbright Fat Finger
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China’s securities watchdog is forging ahead with rules that allow brokers to invest in complex financial products and enter risky new businesses even after an unprecedented $3.8 billion trading error roiled markets.
In the past six weeks, the China Securities Regulatory Commission ended an 18-year hiatus on trading of treasury bond futures and said it would let more brokerages borrow stock for short selling. Those measures were disclosed after misplaced bets caused by faulty software at Everbright Securities Co. on Aug. 16 caused the wildest swings in Shanghai shares since 2009.