Regulators Limit Pledged-Stock Loans

Regulators have tightened rules on pledged-stock loans in a bid to curb reckless borrowing by major shareholders and steer capital raised through pledged stocks into the real economy.

Pledged-stock repurchase agreements are a method used by major shareholders of listed companies to get funding from financial institutions by pledging their shares and then agreeing to buy them back at a prearranged date.