What are the recent considerations of the Securities Regulatory Commission in terms of making good use of the countercyclical adjustment function in the financing and securities lending business? Answer: Securities financing is one of the important basic systems in the capital market. It has a positive effect on calming irrational fluctuations, promoting price discovery, attracting medium- to long-term capital to enter the market, and meeting investors' financing needs. In January 2026, according to the market situation at the time, the Shanghai and Shenzhen North Stock Exchange raised the financing guarantee ratio from 80% to 100%, which played a positive role in reducing the accumulation of leveraged risk in the procyclical cycle, promoting rational trading, and preventing and controlling risks in advance. Recently, financing balances and trading activity have declined markedly, and the overall level of leverage has stabilized. In order to stabilize the capital market, boost investor confidence, and promote the functioning of the securities lending business, the Securities Regulatory Commission will work with the stock exchange to guide securities companies to conduct comprehensive research on risk control indicators such as financing deposit ratio, conversion rate of securities that can be covered by margin, and maintenance guarantee ratio, and further optimize them to maintain flexibility. On the basis that risk is generally manageable, according to legal countercyclical adjustment arrangements, financing space is moderately released, existing capital is revitalized, and market liquidity is enhanced. Investors should continue to uphold the concept of rational investment and make rational use of financing instruments according to their own risk tolerance. The Securities Regulatory Commission will continue to urge securities companies to effectively strengthen risk management and protect the legitimate rights and interests of investors.

What are the recent considerations of the Securities Regulatory Commission in terms of making good use of the countercyclical adjustment function in the financing and securities lending business? Answer: Securities financing is one of the important basic systems in the capital market. It has a positive effect on calming irrational fluctuations, promoting price discovery, attracting medium- to long-term capital to enter the market, and meeting investors' financing needs. In January 2026, according to the market situation at the time, the Shanghai and Shenzhen North Stock Exchange raised the financing guarantee ratio from 80% to 100%, which played a positive role in reducing the accumulation of leveraged risk in the procyclical cycle, promoting rational trading, and preventing and controlling risks in advance. Recently, financing balances and trading activity have declined markedly, and the overall level of leverage has stabilized. In order to stabilize the capital market, boost investor confidence, and promote the functioning of the securities lending business, the Securities Regulatory Commission will work with the stock exchange to guide securities companies to conduct comprehensive research on risk control indicators such as financing deposit ratio, conversion rate of securities that can be covered by margin, and maintenance guarantee ratio, and further optimize them to maintain flexibility. On the basis that risk is generally manageable, according to legal countercyclical adjustment arrangements, financing space is moderately released, existing capital is revitalized, and market liquidity is enhanced. Investors should continue to uphold the concept of rational investment and make rational use of financing instruments according to their own risk tolerance. The Securities Regulatory Commission will continue to urge securities companies to effectively strengthen risk management and protect the legitimate rights and interests of investors.