China’s stock exchanges announced on Wednesday that they are raising the minimum margin requirement for investors using financing to purchase securities from 80% back to 100%, following approval from the China Securities Regulatory Commission (CSRC).

The Shanghai, Shenzhen and Beijing exchanges had cut the financing margin requirement from 100% to 80% in August 2023, a move that helped steadily boost financing volumes and trading activity.

In recent months, margin trading has picked up noticeably, and market liquidity remains relatively ample. According to statutory counter-cyclical adjustment rules, the exchanges said the increase aims to moderate leverage, better protect investors’ legal rights, and promote long-term market stability and healthy development.

The exchanges clarified that the adjustment applies only to new financing contracts. Existing contracts and their extensions will continue to follow the previous margin requirements.