The China Securities Regulatory Commission issued the Several Provisions on Short-swing Trading Regulation to implement the Securities Law short-swing trading regime and clarify the supervisory framework for major shareholders and directors supervisors and senior management, with the rules taking effect on 7 April 2026. The provisions set out when the short-swing trading restrictions apply, covering cases where the investor has the relevant status at both the buy and sell legs as well as cases where the status is acquired between purchase and sale. They also broaden and specify the covered instrument set by defining other equity-like securities to include depositary receipts, exchangeable bonds and convertible bonds, and they standardise key calculation points by using the securities transfer registration date as the buy or sell time. For holding calculations, major shareholder ownership is measured on a consolidated basis across a company’s domestically and overseas issued shares, while foreign investors’ holdings are aggregated across different holding channels. The rules further codify 13 exemption scenarios, including preferred share conversion, ETF subscription and redemption, certain equity incentive grant registration and exercise events, judicial compulsory enforcement, market-making trades and mandated repurchases for fraudulent issuance, while excluding exemptions where information advantages are used to seek illegal gains. For professionally managed structures with separate securities accounts opened by product or portfolio, holdings can be calculated separately at the product or portfolio level via the relevant OneCode account for a range of institutional funds, subject to loss of separate treatment where independent compliant operation cannot be achieved or where conflicts of interest or breaches arise. The CSRC noted it had already completed a public consultation and stakeholder engagement on the provisions and will work with securities trading venues and other parties on implementation.
China Securities Regulatory Commission 2026-03-06
China Securities Regulatory Commission issues short-swing trading rules effective 7 April 2026 clarifying scope exemptions and product-level holding calculations
The China Securities Regulatory Commission issued the Several Provisions on Short-swing Trading Regulation to implement the Securities Law regime, effective 7 April 2026. The provisions clarify the supervisory framework for major shareholders and senior management, define covered instruments, and standardize calculation points. They also codify 13 exemption scenarios and specify conditions for professionally managed structures.