SHANGHAI, July 27 (Reuters) - China's securities regulator has asked firms to curb the use of borrowed money when participating in secondary private equity placements, the China Securities Journal reported on Wednesday, citing anonymous investment banking sources.
In a recent training session given by the China Securities Regulatory Commission (CSRC), firms were given "window guidance" that any firm owning five percent or more of a company should not use money raised through wealth management platforms or other third party fundraising platforms to subscribe.
In addition, CSRC indicated that firms should limit the use of banking facilities to their intended use.
According to China Securities Journal's sources, the purpose of the guidance is to increase transparency in the subscription process. (Reporting By Nathaniel Taplin; Editing by Sam Holmes)