June 9, The China Securities Regulatory Commission (CSRC), the country’s securities watchdog, has added five securities companies to a pilot scheme for margin trading and short selling.

Shenyin & Wanguo Securities Co. Ltd., Orient Securities Co. Ltd., China Merchants Securities Co. Ltd., Huatai Securities Co. Ltd. and China Galaxy Securities Co. Ltd. are the new market players, the CSRC said in a statement, taking the total number of participants to 11.

The government began the pilot scheme on March 31.

The CSRC also lowered the threshold for brokerages to take part in the scheme. A brokerage with net capital of RMB 3 billion and a “B” grade rating from the regulator can apply to take part in the pilot scheme. Participants previously needed net capital of RMB 5 billion and an “A” grade rating. Investors still need at least RMB 500,000 to open a new account.

The grading of a brokerage is an overall appraisal of the company’s net capital reserves, IT system, general operation and its business proposal for margin trading and short selling, the CSRC said in an earlier statement.

According to a CSRC publication, another 15 companies, which are smaller in terms of business scale, have met the new criteria. Those companies, including Guoyuan Securities Co. Ltd. (000728.SZ) and Essence Securities Co. Ltd., are expected to form the trial third group.

By the end of May, total trading volume of margin trading and short selling on the Shanghai and Shenzhen markets reached RMB 3.05 billion, of which margin trading accounted for RMB 2.83 billion.

The government hopes margin trading and short selling will bolster business for securities brokerages, improve market liquidity and spur the development of new financial products.