Securities regulator to expand short-selling trial

The China Securities Regulatory Commission (CSRC) is likely to put a new technical system to expand short selling into trial use before the end of this year, though no official timetable has yet been announced, South China Morning Post reported. The new system will allow brokerages to borrow equities from other institutions and relend to their clients, who, betting on decreasing share prices, can then sell the shares. “It is certain that the regulator will give a green light to the liberalization sooner than later,” said one Beijing-based fund manager briefed by CSRC officials on the matter. “The primary concern among the officials is that a short selling spree would cause the fragile stock market to collapse.” CSRC now faces pressure to support brokerages that have suffered due to sluggish trading volumes amid the bear market.