Margin trade service to more than quadruple capital

State-owned China Securities Finance Corp., a provider of margin trading services to brokerages, will boost its capital base to nearly 100 billion yuan (16.3 billion U.S. dollars) from 24 billion yuan, a senior official said on Friday.

The replenishment will come from current shareholders, which include the Shanghai and Shenzhen stock exchanges, China Financial Futures Exchange and China Securities Depository and Clearing Co., said Zhang Xiaojun, spokesman for the China Securities Regulatory Commission (CSRC).

The corporation will raise more funds from various channels to expand business and stabilize markets, Zhang said.

The Chinese mainland stock markets were among the world's best performers earlier this year, with the key Shanghai index rising more than 150 percent in 12 months, partly fueled by margin trading. It hit a peak on June 12 and reversed course to plunge more than 28 percent.

The CSRC has responded to the sharp declines by relaxing rules on brokerages' margin trading businesses.

Late on Wednesday, it said it would cancel a rule stipulating that investors must pay an additional guarantee within two trading days if the collateral ratio reaches a 130-percent warning level, and allowed brokers and clients to negotiate on the term and percentage of additional guarantee, instead of facing forced liquidation.

The amendment also gave investors with less than 500,000 yuan in securities assets, which had been a minimum threshold for margin trading, the nod to continue trading. Endi