China Regulator Plans to Allow Margin Trading, Short Selling – Bloomberg

From Bloomberg News (link)

China plans to let investors buy stocks using borrowed money and sell shares they don’t own, seeking to channel more of the nation’s $4 trillion of bank deposits into the stock market and boost trading.

The China Securities Regulatory Commission may select five brokerages to start margin financing and short-selling services this year, according to a draft plan sent to the Shanghai and Shenzhen stock exchanges and obtained by Bloomberg News. The pilot program may be expanded to other companies later, it said.

The changes would generate revenue for brokerages and increase the funds available for investment as the government prepares to end a yearlong ban on public share sales, paving the way for offerings by companies including Air China Ltd. China is seeking to bring its stock market in line with global practices and sustain a recovery in benchmark indexes from eight-year lows last year.

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