MINIU98.COM, a Chinese P2P company that provides loans to stock investors, has become the first firm to publicly announce an exit from this type of business, in response to regulators’ renewed crackdown on grey-market margin financing.

    China’s securities regulator Sunday warned brokerages not to open their trading systems to firms engaged in illegal businesses and instructed them to review trades and enforce rules that require the use of real names and national identification numbers.

    Xinhua yesterday reported that China’s Internet regulator said it had ordered local authorities and Web hosting companies to pull illegal online advertisements offering loans for stock market investment, including letting investors use multiple accounts to buy shares.

    “Such acts have violated the securities law and relevant regulations, which forbid unauthorized security trading services,” said the Cyberspace Administration of China, according to the Xinhua article.

    In the lightly regulated grey-market for margin lending, so called “fund-matching” companies distribute loans for leveraged stock purchases and their clients typically trade in subdivided securities accounts via trading platforms connected to brokerages, often without using their own identities. (SD-Agencies)