In the wake of major Chinese banks lowering their deposit rates—with current account annual interest rates dropping to 0.05%—multiple brokerages have followed suit by reducing interest rates on client margin funds. The move aligns with regulatory requirements that mandate securities firms to hold client margin funds in third-party custodial banks and pay interest based on prevailing deposit rates.
At least 13 brokerages, including Guotou Securities, Bank of China Securities, Industrial Securities, and GF Securities, have announced adjustments to their RMB margin interest rates, standardizing the annualized rate at 0.05%. The cuts reflect broader financial sector trends as institutions adapt to declining benchmark rates.
Client margin funds, which represent available cash in securities accounts, will now yield minimal returns. While the changes reduce costs for brokerages, they further diminish income opportunities for investors already grappling with low-interest environments. The synchronized adjustments highlight the tight linkage between banking and securities sectors in China’s regulated financial ecosystem.
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