China Tightens Rules for Short Selling to Prop Up Stocks

What’s new: Stock investors on the Chinese mainland will have to set aside more in collateral when they borrow securities to sell, according to new rules announced by the China Securities Regulatory Commission on Saturday.

The tightened rules on securities borrowing — an important tool for short selling — raised the minimum margin ratio for borrowers to 80% from 50%. For privately offered securities investment funds, the minimum ratio will be 100%. These changes go into effect on Oct. 30.