China doubles deposit requirements for margin trading

The Shanghai and Shenzhen stock exchanges have doubled the minimum requirement for margin trading to 100%.

The move announced on Friday means investors will now be required to have the same level of funds in their accounts as the amount they are looking to borrow.

A spokesman for the China Securities Regulatory Commission said the move, which was prompted by the recent rapid recovery in margin lending, was necessary in order to protect investors' legal rights and “prevent systemic risks”.

Margin trading is a practice whereby investors are only required to deposit a small proportion of the value of their trades, meaning both profits and losses can be hefty.