China Bans Major Institutional Investors from Reducing Equity Holdings at the Open and Close

China had deployed new curbs to ban major institutional investors from reducing equity holdings at the open and close of each trading day. The action was an attempt by the government to stimulate the country’s stock market, which accumulated a value of $8.6 trillion.

The China Securities Regulatory Commission (CSRC) applied the regulation to major asset managers and the proprietary trading desks of brokerages, while also cooperating with the country’s stock exchanges to oversee short selling in its stock market, as well as cautioning companies that benefited from the wagers.

The ban attempt indicated that the Chinese government was urged to tighten the market activity, as it would restrict hedge funds and other institutional investors from selling more shares than they bought during the first and last 30 minutes of the trading session.

Meanwhile, there was also uncertainty as to whether the ban would be applied across the financial industry or affect individual investors with a large portion of stock volume in the market.