CHINA TIGHTENS STOCK MARKET RULES AFTER SELL-OFF – Informal measures introduced by the regulator did little to shore up financial markets

China has tightened its financial industry rules as the government tries to halt a deepening sell-off in the world’s second largest economy.

Nearly $6tn (£4.7tn) has been wiped off Chinese and Hong Kong stocks since their most recent peak three years ago. The China Securities Regulatory Commission (CSRC) says the measures will create “a fairer market order”.

Under the new rules limits will be put on so-called “short-selling” from Monday.

Short selling is when a trader bets that a share or other asset will fall in value. They borrow the asset and sell it immediately with the aim of buying it back later at a lower price and keeping the difference.

The latest announcement by the CSRC comes after a series of informal measures introduced by the regulator over the last year did little to shore up financial markets.