【Financial Str. Release】China STAR Market expected to start securities borrowing biz for market makers soon, report

Yi Huiman, chairman of the China Securities Regulatory Commission, addresses the launching ceremony of the sci-tech innovation board of the Shanghai Stock Exchange at the Lujiazui Forum in Shanghai, east China, June 13, 2019. 

BEIJING, Nov. 14 (Xinhua) -- China's sci-tech innovation board, better known as the STAR Market, is expected to start securities borrowing business for market makers in near future, reported Securities Daily on Monday.

Market makers on the STAR Market can obtain stocks through secondary market purchase and borrowing, after kicking off of securities borrowing business, from the China Securities Finance Co., Ltd. (CSF), said the newspaper citing industry insiders. 

On October 28, Shanghai Stock Exchange, to which the STAR Market belongs, CSF and China Securities Depository and Clearing Co., Ltd. jointly released rules on securities borrowing business for market making on STAR Market.

According to the rules, securities brokers applying for borrowing STAR Market-listed securities from CSF for market making should be qualified for the service from both the business and technical aspects and submit related application materials.

After preparations of about two weeks, the securities borrowing business for market makers on STAR Market may start this week, said the newspaper.

For instance, Shenwan Hongyuan Securities submitted related application materials to CSF recently and passed technical testing last week, reported the newspaper quoting an expert from the securities broker.

For market makers, they need to hold a large amount of stocks to trade with investors and sound stock holdings management serves always as a vital basis for providing continuous and stable liquidity for stock market.

The expected start of the securities borrowing mechanism for market makers on STAR Market will enrich their source of securities and facilitate their market making for STAR Market-listed stocks without increasing their risk exposure, noted industry experts. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)