Regulatory Alerts1995-01-18
Added · Updated
Regulations Governing the Central Bank of China Administration of Accommodations Extended by Banks to Securities Finance Companies or Securities Firms
The regulations prohibit banks from extending financing to securities finance companies if the outstanding balance exceeds six times the firm's net worth or if external debt exceeds 11.5 times net worth. Financing to securities firms is capped at 1.5 times their net worth, with specific limits of 60 percent of underwritten stock prices for underwriting firms. Banks must require affidavits from borrowers certifying compliance with these limits and submit monthly reports, recalling any excess financing if violations are detected.
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