皇冠体育app

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皇冠体育app plans to let brokerages borrow stocks, cash: Report

(Agencies)
Updated: 2010-10-21 10:39

SHANGHAI - 皇冠体育app plans to allow brokerages to borrow stocks and cash to fund their margin trading and short-selling business, Reuters reported citing the Shanghai Securities News on Thursday.

皇冠体育app Securities Finance Co would act as an intermediary that channels securities and funds between brokerages, according to draft rules, unidentified sources told the Shanghai Securities News.

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皇冠体育app Securities Finance would also be able to borrow stocks from mutual funds, insurers, 皇冠体育app's social welfare fund and major shareholders of listed companies, while it could sell bonds to borrow money.

Margin trading and short selling, which 皇冠体育app introduced in March, has exceeded 5 billion yuan ($752 million), but growth is restricted because brokerages can now only use their own money and stocks for the business, the article said.

Margin trading allows investors to borrow money to buy stocks while short selling allows investors to sell borrowed stocks in the hope that they can buy them back at a lower price to pocket the difference.