Securities regulator loosens leverage rules for Chinese brokerages

The China Securities Regulatory Commission has announced it will let brokerages securitize margin loans and to accept new kinds of collateral – including real estate – from clients whose stock account value falls below 1.3 times the amount of borrowed money, Bloomberg reported. The regulator, which cut short a public consultation period for the rules due to “market conditions,” said investors no longer needed to supply the extra collateral within two days of value dropping below said lower limit. The new guidelines also let brokerages give six-month extensions to margin trading and short selling contracts instead of liquidating clients’ positions.