NEWS

Fan Junli and Zhao Jingting report (August 18, 2010) that “Caixin has learned that a long-awaited mechanism for broader securities lending products may be approved by regulators within six months, widening the market for margin lending and short selling.

“At an Aug. 13 meeting, officials from government supervision departments and funds companies discussed a variety of technical details surrounding securities lending.

“Meeting participants said discussions highlighted whether funds should participate in the securities lending business, when stakeholder meetings might be needed, how to price securities packages, and whether capital raised through securities financing should be re-invested.

“Margin lending has been undergoing tests under a government-backed pilot project since March 31, when margin and securities lending products were allowed on a limited basis. The mechanism now under discussion could open a door to full market participation by next year.”