Chinese P2P lender Miniu first to axe margin loans after crackdown by Beijing to tame market

Miniu98.com, one of China’s largest peer-to-peer (P2P) lending platforms, will stop margin lending immediately in response to a recent crackdown on the practice by China's securities regulator, the company said on Monday.

China Securities Regulatory Commission (CSRC) issued a set of directives one day earlier aimed at cleaning up illegal trades.

It also warned brokerages to review trades carefully and not open their systems to firms engaged in illicit businesses.

As fears grow that Chinese investors may use illegal means to borrow so they can bet on the Chinese stock market’s imminent rebound, the CSRC said it would enforce the use of real names and national identification numbers.

This is designed to help stamp out the illegal use of virtual accounts, or those that belong to other people, in a bid to stabilise the market, which shed almost a third of its value in recent weeks.

Although the commission did not specifically mention margin trading, clients of companies like Miniu98.com often receive loans for leveraged stock purchases.

This allows them to trade in subdivided securities accounts via trading platforms connected to brokerages that do not always require them to disclose their true identities, making this a grey market, Reuters reported.