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China to Crack Down on Market Manipulation as Stocks Fall Again

The CSRC is examining recent short-selling activity for stock-index futures amid the slump, people with knowledge of the matter said on Thursday. The China Financial Futures Exchange said on Wednesday that it didn’t find “large scale” short selling when it checked stock index futures trading by 38 Qualified Foreign Institutional Investors (QFII) and 25 Renminbi QFII investors.

The Shanghai Composite Index fell 3.5 percent on Thursday, bringing its decline from its June 12 peak to 24 percent. Futures on the FTSE China A50 Index expiring in July fell 0.5 percent as of 11:23 a.m. New York time.

The People’s Bank of China’s weekend interest-rate cut failed to stem the stock rout, prompting the CSRC on Monday to urge investors to act rationally and not believe “shorting China rumors.” On Wednesday, China’s government eased margin-trading rules and the nation’s markets and clearing system announced fee cuts.

http://www.bloomberg.com/news/articles/2015-07-02/china-s-csrc-to-crack-down-on-stock-market-manipulation