China Approves New Investment Options

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Jan. 12 – The State Council has approved “in principle” the launch of index futures and margin trading business giving investors more options to get into the Chinese market, reports Xinhua.

This will help develop China’s capital market to international standards and regulate the volatile stock market. The option to buy stock index futures, trading on margin and short selling index stocks will now be available in addition to buying and selling stocks.

The China Securities Regulatory Commission (CSRC) will evaluate the first batch of securities companies qualified for the pilot program for margin trading business based on their net capital, risk control and regulatory management.  The agency says it will take around three months to launch the stock-index futures.

Margin trading is when securities companies lend money to investors, using the securities as collateral for the loan.