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Recently, SZSE officially release the Circular on Adjusting the Scope of Underlying Stocks for Margin Trading and Securities Lending, which provides that the underlying stocks expand from the 98 stocks conforming to the standards of SZSE 100 Index component stocks to 200 stocks. The expansion of underlying stocks will further broaden the coverage of underlying securities, improving the mechanism of shaping the stock price and boosting the balance of market supply and demand, and is thus not only conductive to meeting the diversified trading needs of investors, but also beneficial to the sound development of capital market.
It is reported that ever since 2010, margin trading and securities lending business has witnessed a steady development. As of December 31, 2012, the number of securities companies engaged in margin trading and securities lending has reached 74, the number of investor credit securities accounts reaching 500 thousand, the balance of margin trading and securities lending reaching CNY27.7 billion, the accumulated trading volume reaching CNY443.3 billion. Among these trading, margin trading accounts for 80%, injecting substantial incremental fund in the market. In order to accommodate to the new market environment, SZSE makes adjustment to the scope of underlying stocks according the regulation of relevant business. The expansion of scope of underlying stocks by SZSE is an innovation which references the standards for the selecting index component stocks, rather than relying on previous approach that link the underlying stocks with index component stocks. The list of underlying stocks is sequenced after calculated by weighted evaluation formula, with special consideration given to factors such as large market capitalization, activeness of trading, wider coverage of the boards and stable market performance. According to the statistics, the circulation market value and trading volume of adjusted underlying stocks in Shenzhen Market account for respectively 54.46% and 42.26% of those of Shenzhen Market, with the coverage of underlying stocks broaden distinctly. The multi-layer frame structure of underlying stocks is basically formed with the stocks on ChiNext Board first included among the underlying stocks for margin trading and securities lending, and the further increment of underlying stocks in SME board.
SZSE will continue to keep a close eye on the trading activities of market margin trading and securities lending, and strictly crake down the abnormal trading behaviors such as manipulating or pressing market price via margin trading and securities lending. SZSE required that the securities companies shall adjust the list of lendable securities on the basis of the customers’ needs and in the light of underlying securities scope released by SZSE. Securities companies are also required to inform the customers the change of underlying securities in a timely manner via varies of channels, including the companies’ website and trading system, so as to guarantee the orderly operation of the business
