The Securities Regulatory Commission said it’s increasing the margin ratio for ordinary securities borrowing to at least 80% from 50% and that for hedge funds to 100%, effective Oct. 30.
Other rules that come into force Monday will restrict lending of shares by strategic investors and senior management and increase supervision of “various arbitrage activities,” it added in a statement on Saturday.
Beijing is pulling out all the stops to reverse a downdraft in equities after global funds offloaded a record 89.7 billion yuan ($12.3 billion) of onshore stocks via trading links with Hong Kong in August.
The foreign investors’ withdrawal from Chinese assets could be a unique opportunity for local ones, as some of the assets continue to trade at multi-year price lows while the government makes efforts to support the market.