×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: Interactive | Brokers | Bans | Borrowing | Buy | China | Stocks

Interactive Brokers Bans Borrowing to Buy China Stocks

Wednesday, 08 June 2011 01:52 PM

Interactive Brokers is banning clients from borrowing money to buy some Chinese stocks, according to the brokerage firm's website.

The ban comes amid a rash of Chinese accounting scandals and inquiries by U.S. regulators that have resulted in auditor resignations, sharp stock declines and some delistings.

Interactive Brokers' ban applies to about 160 Chinese securities and cites "elevated risk concerns" as the reason for the action. The brokerage began enforcing the ban on Monday and will phase it in over the course of this week.

A spokesman for Interactive Brokers declined to comment beyond what was posted on the website.

If a stock bought with a loan suddenly declines, whoever lent the money could have trouble getting it back.

In this case, while the ban on such "margin" purchases of some Chinese stocks could protect against a broader downturn, it could also put selling pressure on the stocks as investors who cannot immediately pay back the loans otherwise sell the stocks to do so.

Based in Greenwich, Connecticut, Interactive Brokers operates in more than 80 markets globally. In April, the brokerage banned borrowing to buy some Chinese reverse merger stocks, which are the Chinese securities that have had the most problems.

It was not immediately known whether any other brokerages were considering similar policies.

© 2022 Thomson/Reuters. All rights reserved.


FinanceNews
Interactive Brokers is banning clients from borrowing money to buy some Chinese stocks, according to the brokerage firm's website. The ban comes amid a rash of Chinese accounting scandals and inquiries by U.S. regulators that have resulted in auditor resignations, sharp...
Interactive,Brokers,Bans,Borrowing,Buy,China,Stocks
214
2011-52-08
Wednesday, 08 June 2011 01:52 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved