CSRC Weekly: Crackdown on Market Manipulators Increasing Leverage

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CSRC revealed that it will further crackdown on market manipulation behaviors that increase leverage to prevent further aggravated market risks. The spokesperson of the CSRC, Gao Li, stressed that some market participants have gained greater capital advantages and implemented manipulation via private financing channels. These include asset management plans, private equity funds and more, which cause false market signals and can seriously mislead investors.

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Gao also stated that private financing channels of the market manipulator often have a structured design and a forced liquidation mechanism. When there is a large-scale decline in the market or an individual stock, it may trigger a negative chain reaction of the market or stock price, which will further aggravate market risk. CSRC will continue to strengthen supervision and enforcement, maintain a fair and open market order, and protect the legitimate rights and interests of investors. Also, CSRC said in the first half of the year that CSRC formulated nine regulations and 23 normative documents, including 'Measures for the Administration of Issuance and Transaction of Depository Receipts'.

Harold Hsu
Senior Analyst & client relationship specialist