Chinse Authority Ban Mass Stock Transaction before 20th Congress

The 20th National Congress of the Chinese Communist Party (CCP) will be held in Beijing on October 16th, and recently the CCP’s regulatory authorities have issued instructions to domestic funds and brokerages to avoid investment activities that are likely to cause large market volatility, including large-scale selling and buying of stocks, before and during the conference.

 The report pointed out that under the tide of interest rate hikes by central banks led by the U.S. Federal Reserve, the global stock market has been bleak, and Chinese A-shares have also entered a unilateral downward trend since the middle and late this month. 

 One of the sources said that regulators have asked funds and brokerages not to sell on a large scale, nor allow large-scale buying to keep market prices stable. There is no written document for the guidance, and the requirement is notified to related institutions by phone calls. Another market source in eastern China said they had received a similar official verbal notification.

 On the other hand, some fund companies said they had not received the notice. Analysts said that the recent decline in the stock market has been relatively mild, and the Shanghai Stock Exchange Index is still above 3,000 points, so it is not enough to issue orders to every institution.