China Securities Regulatory Commission (CSRC) has issued a verbal directive to brokerages to bar their clients from selling borrowed stocks on February 3.
China
has taken steps to limit short-selling activities as the
country's financial markets prepare to reopen on Monday amid an
outbreak of a new coronavirus, three sources with direct knowledge of
the matter told Reuters.
The
sources said China Securities Regulatory Commission (CSRC) had issued
a verbal directive to brokerages including Citic Securities Co. and
China International Capital Corp. to bar their clients from selling
borrowed stocks on February 3.
It
was not clear if the suspension -- which was first reported on Sunday
by Chinese media outlet 21st Century Business Herald -- would be
extended beyond Monday, one of the sources said.
In
an internal memo sent to its branches, Citic called the move a
"political task" aimed at helping stabilize the market on
the first trading day of the stock market in the Lunar New Year of
Rat as the coronavirus
outbreak unsettles global markets.
Investors
are bracing for a volatile session in Chinese markets when onshore
trades resume on Monday after a break for the Lunar New Year which
was extended by the government.
China's
policy makers have taken various of measures to protect the financial
system from the fallout due to the outbreak. The central bank said it
will inject 1.2 trillion yuan ($174 billion) worth of liquidity into
the markets via reverse repo operations on Monday.
The
CSRC is also considering launching hedging tools for the A-share
market to help alleviate market panic and will suspend evening
sessions of futures trading starting from Monday, it said.
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