China Securities Finance Corporation Limited, Implementing Rules for the Administration of the Margins of the Re-lending Business (Trial Implementation)
中国证券金融股份有限公司转融通业务保证金管理实施细则 (试行)
September 11, 2012 | BY
CLP Temp &The maximum translation rate for stocks underlying margin trading or short sale of securities shall not exceed 65%.
Issued: August 27 2012
Effective: as of date of issuance
Interpreting authority: China Securities Finance Corporation Limited
Applicability: For the purposes of these Rules, the term “margin” means the collateral deposited with the China Securities Finance Corporation Limited (the Company) by securities companies involved in re-lending business that is to act as security for the liabilities arising in connection with the Company's provision of re-lending to securities companies. Margins include cash and securities that can be set off against margins (Article 2).
Before market opening on each trading day, the Company shall announce to the market the list of securities that can be set off against margins for the re-lending business and the translation rates (Article 14).
The Company shall determine the translation rates for securities that can be set off against margins for the re-lending business based on the following criteria:
(1) the maximum translation rate for stocks underlying margin trading or short sale of securities shall not exceed 65% and that for other listed stocks shall not exceed 60%; the translation rate for A shares subject to special treatment, the listing of which has been suspended or the trading of which has been suspended for at least 30 trading days in succession shall be 0%;
(2) the maximum translation rate for exchange traded funds (ETFs) shall not exceed 85%;
(3) the maximum translation rate for sovereign bonds shall not exceed 90%;
(4) the maximum translation rate for other listed securities investment funds and bonds shall not exceed 75%; and
(5) the translation rate for warrants shall be 0% (Article 15).
Related legislation: Trial Measures for the Regulation of the Re-lending Business, Oct 26 2011, CLP 2011 No.10 p.29; Guiding Opinion on Pilot Engagement in Margin Trading and Short Sale of Securities by Securities Companies, Jan 22 2010, CLP 2010 No.2 p.32; Rules on the Re-lending Business (Trial Implementation) , Aug 27 2012, CLP 2012 No.7 p.33; Shanghai Stock Exchange, Implementing Measures for Securities Lending of the Re-lending Business (Trial Implementation), Aug 27 2012, CLP 2012 No.7 p.36; and Shenzhen Stock Exchange, Implementing Measures for Securities Lending of the Re-lending Business (Trial Implementation), Aug 27 2012, CLP 2012 No.7 p.37
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