CSRC Suspends A-share m88 sport betting app Refinancing – An Interim Measure for Counter-Cyclical Adjustment

On July10, 2024, the China m88 sport betting app Regulatory Commission (CSRC) announced the suspension of all A-share m88 sport betting app refinancing. In the press release, the CSRC said that the decision was made after assessing the current market conditions and after an application by the China m88 sport betting app Financing Corporation Limited, who is authorized to provide m88 sport betting app refinancing services to m88 sport betting app firms, responding to investors’ concerns and aiming to maintain market stability. We believe the measure is an interim measure aiming to further stabilize the market.

The CSRC announced that (i) existing m88 sport betting app refinancing contracts can be extended but must be settled no later than September 30, 2024; (ii) the lowest margin ratio for m88 sport betting app borrowing and lending (SBL) should be adjusted from 80% to 100%; and (iii) the lowest margin ratio for SBL applicable to private m88 sport betting app investment funds will be adjusted from 100% to 120%. These increased ratios will be implemented from July 22, 2024.

According to the press release, the CSRC reviewed the evolution of margin financing, SBL, and m88 sport betting app refinancing businesses and acknowledged their positive effect to the market and also that these businesses can be utilized as tools for the regulatory authority to make counter-cyclical adjustment towards the market adapting to the change of the market conditions, hence explaining that these suspension measures and counter-cyclical adjustments taken by the regulatory authority are temporary.

The CSRC noted that relevant regulatory measures targeting SBL and m88 sport betting app refinancing have already been implemented since August 2023. This includes (i) restricting strategic investors from lending out shares obtained through strategic placement, (ii) increasing the margin ratio for SBL, (iii) reducing the efficiency of m88 sport betting app transfers under the agreed-transactions of m88 sport betting app refinancing businesses, (iv) suspending the increase in the size of m88 sport betting app refinancing, (v) requiring m88 sport betting app firms to strengthen the management of client trading behavior, and (vi) enhancing regulatory enforcement against improper arbitrage activities using SBL.

According to the press release, by the end of June 2024, SBL and m88 sport betting app refinancing had fallen by 64% and 75% respectively. The size of SBL accounts for only about 0.05% of the tradable A-share market value, and the proportion of the daily short selling amount to the daily turnover in the A-share market has decreased from 0.7% to 0.2%. The CSRC believes that the impact of SBL and m88 sport betting app refinancing on the market has significantly weakened and they decided to suspend m88 sport betting app refinancing at this point accordingly.

m88 sport betting app CSRC emphasized m88 sport betting app need to adhere to a problem-solved and goal-oriented approach, with a focus on maintaining m88 sport betting app fairness of legal regimes and enhancing m88 sport betting app stability of m88 sport betting app capital market. m88 sport betting appy stated that m88 sport betting appy will continue to strengm88 sport betting appn daily supervision, implement counter-cyclical adjustments, and crack down on improper arbitrage activities based on market conditions.