China reins in lending for stock trading
BEIJING (AP) — China has tightened controls on lending to finance stock purchases as it winds down emergency measures aimed at stopping a market plunge.
The market regulator announced Friday the amount a broker can lend will be cut by half to the equivalent of the cash an investor puts up, down from the previous level of double that amount.
Regulators imposed curbs on such "margin lending" early this year for fear traders were borrowing too much. Controls were eased after stock prices collapsed in June.
The official Xinhua News Agency said Friday's move was aimed at strengthening risk management in the market.
The main Chinese market index has risen 9 percent over the past month. Last week, the government announced an end to a moratorium on new initial stock offerings.