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On August 5, China Securities Finance issued a solemn statement, pointing out that some self-media recently claimed that "the data on the transfer and financing of securities lending are all virtual, and there is actually no upper limit on the amount of securities lending sales." The relevant statements are rumors.

China Securities Finance: Strongly condemn and initiate legal proceedings

Specifically, China Securities Finance said that since the second half of last year, the China Securities Regulatory Commission has taken a series of measures to strengthen supervision and counter-cyclical regulation based on market conditions and investors' concerns about the securities lending and repo business, and on July 10 this year, it approved China Securities Finance to suspend its securities lending and repo business in accordance with the law.

These measures include: prohibiting the lending of restricted shares, reducing the efficiency of securities lending, and strictly prohibiting the use of securities lending to implement disguised T+0 transactions, etc. According to the notice at the time, the suspension of securities lending business will be implemented from July 11. Existing securities lending contracts can be continued and extended according to law, but must be returned and settled no later than September 30, 2024.

In the statement, China Securities Finance pointed out that the scale of securities lending and securities lending has been steadily declining recently. As of August 2, 2024, the balance of securities lending has dropped to 17.1 billion yuan, a decrease of more than 40% from before the new regulations on July 10; the balance of securities lending has dropped to 21.2 billion yuan, a decrease of more than 30% from before the new regulations.

China Securities Finance said that it welcomes investors to actively make suggestions and put forward feasible optimization suggestions. "We strongly condemn those who create rumors and spread them maliciously on the Internet. For those who cause adverse effects, we will initiate legal procedures and seriously investigate the legal responsibilities of relevant behaviors."

Previously, the China Securities Regulatory Commission had refuted rumors about the transfer and financing issue.

It is worth mentioning that this is not the first time that regulators have refuted rumors about the issue of transfer and financing.

In early June this year, some self-media said that "Zhuanrongtong is retaliating wildly. No wonder the market continues to fall. Zhuanrongtong (June 12) added nearly 170 million shares in one day."

In response to this, the China Securities Regulatory Commission issued a clarification in the form of a reporter's question on June 16, pointing out that the increase in the number of securities lending on June 12 was mainly due to the semi-annual adjustment of index constituents, which led to the "repaying old and borrowing new" securities lending, that is, recovering the existing lending shares such as the removed constituents, and lending the newly included constituents, etc. The self-media quoted the new lending data on individual trading days, ignoring the situation of the recovery of existing stocks and the reduction of balances. According to the data, on June 11 (Tuesday) and June 12 (Wednesday), 280 million shares were newly lent and 170 million shares were newly lent, while 860 million shares and 50 million shares were recovered. The actual cumulative net reduction of securities lending balance in the two days was 460 million shares, and the securities lending balance for the week decreased by 5.4 billion yuan, a decrease of 14%.

On July 26, China Securities Finance also released a special "Two-week Analysis Report on the Suspension of Securities Repo". It pointed out that as of July 24, 2,057 stocks had been returned (i.e. bought) in the two weeks since the suspension of securities repo, accounting for 91% of all stocks with securities repo balances. The balances of the five stocks with the largest securities repo balances before the suspension dropped by an average of about 39%.

According to data from the Oriental Fortune Choice financial terminal, as of August 2, there were 3,037 securities (including ETFs and stocks) with margin lending balances, but most of them were small. Among them, the variety with the largest margin lending balance was the CSI 500 ETF (510500), with an amount of 2.195 billion yuan. The stock with the highest margin lending balance was Kweichow Moutai, with a margin lending balance of 135,500 shares and an amount of 188 million yuan.

In terms of securities lending, according to Wind Information statistics, as of August 2, there were 2,103 stocks with securities lending balance.

Among them, the top three banks with the largest balances of securities lending were Nanjing Bank, Wantai Biological, and BAIC BluePark, with balances of 226 million yuan, 217 million yuan, and 213 million yuan, respectively.

Since July 11, as of August 2, the top three individual bond repayments were Yongtai Energy, Vanke A, and Longi Green Energy, with the interval repayment quantities being 19.2077 million shares, 15.743 million shares, and 10.0931 million shares, respectively.

Daily Economic News