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SHANGHAI/SINGAPORE (Reuters) – China’s securities regulator will allow mutual fund managers to sell more shares than they buy each day, in a move introduced late last year to shore up a sluggish stock market. The ban has been lifted, three sources said.
Late last year, the China Securities Regulatory Commission (CSRC) banned major investment trust companies from selling stocks online at any time, responding to calls from top leaders to stabilize the world’s worst-performing market. did.
CSRC did not respond to requests for comment.
One person with direct knowledge of the changes suspected that part of the policy shift was due to increased redemption pressure on funds.
“If you were a net seller of the stock at the end of last year, you would get a call from regulators,” the person said, adding that he had not received any such calls this year.
This makes sense, since “if you can’t sell your shares, you won’t have the funds to repay the redeeming investors.”
Such so-called window guidance, or informal verbal advice from regulators, has disappeared in recent days, two people with direct knowledge of the matter said.
One of the people said, “The restrictions on net selling here have been lifted. Net selling of stocks is now possible.”
China’s blue-chip CSI300 index fell 11% last year amid a sluggish post-coronavirus economic recovery, a deepening real estate crisis and geopolitical tensions.
The CSI300 index remains one of the world’s worst-performing markets in 2023, despite a flurry of government support measures, including lower stamp duty on transactions, restrictions on stock sales by listed companies, and a slowing of the pace of listings. Ta.
In its latest market support package, the CSRC informally asked some of China’s largest mutual fund managers to prioritize launching equity-based funds over funds based on other types of securities. did.
China’s blue-chip index fell to its lowest level in nearly five years on Monday, reflecting strong selling pressure, but traders said this was due to a lack of confidence in the strength of the domestic economy and a lack of confidence in the strength of the U.S. and its allies. This reflects the growing tension between the two countries.
(Reporting by Shanghai Newsroom; Editing by Neil Frick)
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