Securities regulator punishes Chinese brokers for margin trading

The China Securities Regulatory Commission found that Citic Securities (600030.SHA, 6030.HKG), Haitong Securities (6837.HKG, 6000837.SHA) and Guotai Junan Securities had illegally rolled over margin trading contracts for many investors, South China Morning Post reported, citing commission spokesperson Deng Ge. Ge said the three brokerages had been banned from opening new margin trading accounts for three months, but had still failed to correct their mistakes. Margin trading, which allows investors to borrow cash from brokerages to buy shares, has soared since the second half of last year. The latest data from Shanghai’s exchange showed outstanding borrowing for margin trading had reached RMB767 billion (US$123.6 billion), double July’s level.