China Securities Regulatory Commission (CSRC) amended previously strict rules on margin trading business of brokerages amid growing concerns on a plunging stock market.
The amendment canceled the item stipulating that investors should make additional guaranty in two trading days if the ratio of capital they borrowed from brokerages reaches the 130 percent of warning level, and allowed the two sides to decide through discussion instead of compulsory sell-off.
Brokerages will be able to extend contracts with their clients as long as the maximum term is under 6 months, the amendment said.
The revised rules said brokerages that had more-than-permitted margin trading could maintain the current level but forbade further increase.
Individual investors that possess less than 500,000 yuan (around 82,000 U.S. dollars) of securities assets, a threshold for margin trading, were also given the nod to continue their business, according to the amendment.
In addition, the CSRC planned to improve its management on margin trading to fend off risks and ensure the healthy development of the business.
China's stock continued a losing streak on Wednesday. The benchmark Shanghai Composite Index sunk 5.23 percent to finish at 4,053.70 points.
