The "Draft for Comment" stipulates that before the contract expires, the securities company may extend the contract according to the customer's application, and each extension shall not exceed the time limit stipulated by the stock exchange. The Trading Rules of Shanghai Stock Exchange clearly stipulates that the time limit for each extension shall not exceed 6 months. However, the exchange did not specify the number of extensions. Allow margin financing and securities lending to be extended reasonably, and relax the original six-month period, which is expected to be extended by 1-2 times, that is to say, the margin financing and securities lending period is six months, which can be relaxed to 18 months.
Extending the margin financing and securities lending cycle provides convenience for investors, which is beneficial to investors' flexible control and avoids the limited investment strategy. If the investor is overdue, the securities company will force the liquidation operation in order to prevent risks.
Extended data:
The difference between financing and securities lending:
Financing is bullish, investors borrow money from securities companies to buy securities. Securities lending is short selling, which means that investors borrow securities to sell and then return them in the form of securities.
To put it simply, when an investor is optimistic about a stock and wants to buy it, but the money is not enough, he borrows money from a securities company to buy the stock, and then when the stock rises to the target price, the investor sells the stock to repay the loan. This is financing.
Securities lending creates conditions for investors to make money by shorting. When investors are bearish on a stock, they can borrow the stock from a securities company and sell it. After the decline, investors will buy stocks and return them to securities companies, so as to obtain differential income from them.
It should be noted that not all investors can carry out margin financing and securities lending. If the securities investment experience is insufficient, the capital is less than 500,000 yuan, the risk-taking ability is insufficient or there is a record of major breach of contract, the authority of margin financing and securities lending cannot be opened.
Opening conditions for margin financing and securities lending:
The conditions for opening an account for margin financing and securities lending are relatively simple, mainly as follows:
1. Individuals and institutions that comply with national laws and administrative regulations and are allowed to engage in securities trading, individual customers must be at least 18 years old and have full capacity for civil conduct, and ordinary securities accounts must be engaged in securities trading in the company for not less than 6 months, that is, it takes 6 months to open an account;
2. Having no less than 500,000 securities assets is the basic threshold. For capital verification, 500,000 yuan refers to the average daily market value of holding stocks for 20 trading days; Securities assets include transaction settlement funds, stocks, bonds and asset management plans.
3. The evaluation time is less than 2 years, and the customer risk evaluation questionnaire is required to be C4 and C5 with strong risk tolerance, and the one with the lowest risk tolerance or C 1 is not allowed to be opened;
4. Reputable individuals or institutions that are not in the "blacklist" of corporate credit business;
5. Non-shareholders and related persons of the company;
6. It complies with the provisions of the company's appropriateness management, and there is no situation that is not suitable for margin financing and securities lending business.