China furthered efforts to boost the stock market on Thursday, after several moves on Wednesday.
Chinese police joined the securities regulator to probe clues related to "malicious short selling" amid recent chaos in the stock market.
Vice Minister of Public Security Meng Qingfeng led a team and visited the head office of China Securities Regulatory Commission (CSRC) on Thursday morning, a sign that authorities will severely punish operations that violate laws and regulations.
The CSRC announced that China Securities Finance Corporation Limited (CSF), the national margin trading service provider, will provide liquidity to apply for the purchase of a public offering fund.
China's central bank reiterated that it will continue to support the liquidity need of the CSF and has made sufficient re-lending to the CSF and approved the latter to issue short-term financial bonds in the interbank market to replenish liquidity.
The CSF is the only institution to provide margin financing loans to securities companies. It has offered 260 billion yuan (42 billion U.S. dollars) of stock-secured credit for 21 brokerage firms to conduct self-run share purchasing on the market.
The banking regulator, China Banking Regulatory Commission, on Thursday announced it will allow banks to extend mortgage loans that use share funds as collateral. Banks will now be able to discuss redefining mortgage terms of share-secured loans that are due or adjusting collateral with their clients.
Before this, intensive measures were taken on Wednesday. The stock market, however, maintained a slumping trajectory. The benchmark Shanghai Composite Index sank 5.9 percent to finish at 3,507.19 points on Wednesday, down more than 30 percent from a peak of 5,178.19 points on June 12.
On Wednesday, the CSF vowed to purchase more shares of small- and medium-sized listed companies to ease stock market liquidity and offer brokers credit to support stock market.
The central bank on Wednesday vowed to steady stock market and ensure that no systematic and regional financial risks will occur, providing support for the CSF to get sufficient liquidity.
The insurance regulator on Wednesday eased rules for insurers to invest in blue-chips.
The state asset regulator asked central SOEs not to sell shares amid market volatility.
The Ministry of Finance vowed not to sell shares of listed companies amid "abnormal volatility" of stock market.
Central Huijin Investment Co., Ltd., an investment arm of the government, announced on Wednesday evening that it will not sell shares and has asked subsidiaries to keep and buy shares to stabilize the stock market.
