Some securities firms in China will suspend the short selling business from February 3, 2020.

The short selling practice is done by betting that a stock price will decline and you of sell a stock without owning it, hoping to buy it later at a lower price and thus make a profit.

One broker issued a notice internally saying that all clients of the financing transactions and margin trading would be suspended from selling new short selling securities. But the previously existing short selling orders would not be returned.

During the period when the customer suspends the short selling, the exclusive short selling source fee can be waived through negotiation.

At the present, it was learned that the forms of the various brokers’ actions in the industry are not the same. Some suspended short selling, some controlled the unilateral clearance (the bilateral is still available to do). Short selling in the industry however has not completely stopped.

The move by securities firms is to protect the integrity and quality of the securities market and strengthen investor confidence.

Source: 21st Century Business Herald