China Securities Finance Corporation Limited, Rules on the Re-lending Business (Trial Implementation)

Main contents: The term for capital re-lending shall be divided into three levels – seven days, 14 days and 28 days – and that for securities re-lending into five levels – three days, seven days, 14 days, 28 days and 182 days (Article 22).

A securities company's capital re-lending application instruction shall satisfy the following conditions:

(1) each amount applied for shall be an integral multiple of Rmb1 million;

(2) the maximum of any single amount applied for may not be more than Rmb300 million; and

(3) the total re-lending amount applied for by a securities company on any one day for every term level shall not exceed Rmb500 million, unless otherwise provided by the Company (Article 26).

The Company shall accept the following types of securities re-lending applications from securities companies:

(1) non-specified applications; and

(2) specified applications (Article 28).

A securities company's securities re-lending application instructions shall satisfy the following provisions:

(1) each quantity applied for shall be an integral multiple of 100 shares; and

(2) the minimum quantity applied for on any one occasion may not be less than 10,000 shares and the maximum quantity applied for on any one occasion may not be more than 1 million shares (Article 31).

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; Implementing Rules for the Administration of the Margins of the Re-lending Business (Trial Implementation), Aug 27 2012, CLP 2012 No.7 p.34; 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

Issued: August 27 2012

Effective: as of date of issuance

Interpreting authority: China Securities Finance Corporation Limited

Applicability: The re-lending business includes both capital re-lending and securities re-lending. The term “capital re-lending business” means the business activity whereby the China Securities Finance Corporation Limited (the Company) lends its own money or money that it has lawfully raised to a securities company so that it can provide margin trading. The term “securities re-lending business” means the business activity whereby the Company lends its own securities or those that it has lawfully borrowed to a securities company so that it can provide short sale of securities (Article 2).

Main contents: The term for capital re-lending shall be divided into three levels – seven days, 14 days and 28 days – and that for securities re-lending into five levels – three days, seven days, 14 days, 28 days and 182 days (Article 22).

A securities company's capital re-lending application instruction shall satisfy the following conditions:

(1) each amount applied for shall be an integral multiple of Rmb1 million;

(2) the maximum of any single amount applied for may not be more than Rmb300 million; and

(3) the total re-lending amount applied for by a securities company on any one day for every term level shall not exceed Rmb500 million, unless otherwise provided by the Company (Article 26).

The Company shall accept the following types of securities re-lending applications from securities companies:

(1) non-specified applications; and

(2) specified applications (Article 28).

A securities company's securities re-lending application instructions shall satisfy the following provisions:

(1) each quantity applied for shall be an integral multiple of 100 shares; and

(2) the minimum quantity applied for on any one occasion may not be less than 10,000 shares and the maximum quantity applied for on any one occasion may not be more than 1 million shares (Article 31).

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; Implementing Rules for the Administration of the Margins of the Re-lending Business (Trial Implementation), Aug 27 2012, CLP 2012 No.7 p.34; 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