From the end of 2014 through the first half of 2015, China’s share market soared, attracting large numbers of investors and a rapid expansion of investment capital. This very feast of capital market activity witnessed the springing up of numerous umbrella and other types of structured trusts. Lots of bank wealth management funds and private capital entered the stock market through trusts, and these became the mainstream model for participation in margin account share trading (“trust margin trading”). In April 2015, the CSRC decided that trust margin trading amplified fluctuations in the stock market and should be restricted because it was not beneficial to the healthy development of the market. At the time, the scale of trust margin trading had already reached a considerably high level.
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