Notice Of Modifying Article 38 Of “Shanghai Stock Exchange Detailed Rules For Implementation Of Margin Trading And Securities Lending (Revised In 2015)”

Upon approval by the China Securities Regulatory Commission, the Shanghai Stock Exchange (SSE) has modified Article 38 of the “SSE Detailed Rules for Implementation of Margin Trading and Securities Lending (Revised in 2015)”, in a bid to further strengthen the risk management of margin trading and securities lending business and propel the business’s long-term and steady growth. Details of the modification are as follows:

“Article 38 The margin rate of margin-based purchase by an investor should not be lower than 100%.

The margin rate of margin-based purchase refers to the ratio of the margin paid by an investor for margin-based purchase to the margin-based purchase amount, and the formula is: margin rate of margin-based purchase = margin / (number of margin-based purchase × purchase price) ×100%.

The contracts of margin trading and securities lending, unsettled prior to the implementation of the modification to Article 38, and their rollovers shall be subject to the regulations before the modification.

All market participants are required to earnestly prepare for relevant business and technical systems in response to the adjustment to the margin rate of margin-based purchase, so as to ensure smooth and stable operation of the business.

The modification shall come into force on November 23, 2015.