What signal? Leading securities firms have increased the upper limit of margin trading.

The margin balance just surpassed 3 trillion yuan for the first time in late June, but quickly fell in July. The "capacity" issue of margin trading business in brokerage firms continues to be put on the table. On the evening of July 20, GF Securities announced that the Board of Directors approved the proposal to adjust the total scale limit of financing and securities lending business, agreeing to strictly control the total scale of financing and securities lending business within the range prescribed by regulatory authorities. The company's total limit of financing and securities lending business was adjusted to not exceed 2.5 times the net capital of the same period, and authorized the management to decide or adjust specific limits within the range based on market conditions and changes in net capital. This means that GF Securities' margin trading business management method has switched from the previous fixed limit of 190 billion yuan to a dynamic multiple linked to net capital. Based on the net capital of approximately 113.1 billion yuan at the end of the first quarter, the corresponding total margin trading limit is approximately 287.5 billion yuan; a significant increase from the previous 190 billion yuan limit, with an increase of roughly 50%. As the margin balance shifted from a rapid rise to a phase of cooling off, leading brokerage firms continue to raise the ceiling of their business, sending a signal not only of "expanding scale" but also of resetting the flexibility of credit business between market activity, customer financing demands, and their own net capital constraints. From a fixed limit to a net capital multiple, GF Securities raised its margin trading limit by nearly a trillion yuan The core change in GF Securities' adjustment this time is directly linking the margin trading limit to the net capital level. While a fixed limit is more straightforward, in the context of significantly increased market trading activity and continuous changes in brokerage net capital size, it is prone to having ample liquidity when the market is sluggish and tight liquidity when the market is hot. By measuring with a net capital multiple, the limit of the business scale will dynamically adjust with changes in net capital, aligning more closely with risk capital management principles. According to the announcement, GF Securities authorized the management to decide or adjust the specific limit of the company's financing and securities lending business within the range based on market conditions and changes in net capital. The margin trading business itself is an important link between brokerage wealth management and institutional trading services, which not only affects customer trading activity but also the efficiency of brokerage capital usage. Based on a direct calculation of net capital of 113.1 billion yuan, the 2.5-times limit corresponds to a total business scale limit of 287.5 billion yuan, an increase of approximately 975 billion yuan from the original limit of 190 billion yuan, representing an increase of about 51%, creating nearly a billion yuan of additional space. It is worth noting that GF Securities did not directly adopt the common 3-times measure used by many other brokerage firms, but set it at 2.5 times. While the business flexibility has been opened up, the limit has not been pushed to a higher position in the industry. Several brokerage firms have already raised their margin trading limits Since last year, along with the recovery of market trading and the continuous increase in margin balances, many brokerage firms have successively raised their credit business limits: On March 29, 2025, ChinaLin raised the total limit of credit business to 62 billion yuan, and later raised it to 80 billion yuan; On April 26, 2025, Shanxi raised the margin trading business limit from 80 billion yuan to 100 billion yuan; On May 1, 2025, Industrial's Board of Directors approved raising the total limit of credit business (including margin trading) using its own funds; On September 24, 2025, Zheshang raised the total limit of financing businesses centered on margin trading from 40 billion yuan to 50 billion yuan; On October 30, 2025, CMSC raised the total margin trading limit from 150 billion yuan to 250 billion yuan; On October 30, 2025, Huatai removed the fixed amount limit and changed to an elastic model where the total margin trading scale is <= 3 times the net capital of the same period; On December 9, 2025, Changjiang adjusted the credit business limit to not exceed 300% of the net capital at the end of 2024; In early 2026, Donghai Securities raised the total margin trading limit from 10.2 billion yuan to 11 billion yuan; On February 11, 2026, Caida raised the limit of margin trading business from 100% of net capital to 140%. These adjustments show a common trend: competition in brokerage margin trading business is no longer just about interest rates, securities sources, and customer service, but also about net capital strength and capital allocation capabilities. Margin trading is a typical capital-intensive business. The stronger the demand for customer financing, the more stable sources of funds, net capital support, and risk management capabilities a brokerage firm needs to have. The firm with thicker net capital, lower financing costs, wider customer base, has a better ability to take on incremental demand when the market heats up. Margin balance rapidly increased in the second quarter and quickly decreased in July The background of GF Securities raising the limit is that the margin trading market has just experienced a very intense cold-hot switch. On June 23, the margin balance of A shares broke through the 3 trillion yuan mark for the first time, with a total margin balance in Shanghai, Shenzhen, and Beijing reaching approximately 3.001 trillion yuan, marking a historical high and a sign of the market's risk appetite rebounding. However, after entering July, financing funds quickly cooled down. As of July 17, the margin financing balance of A shares was approximately 27.576 trillion yuan, a decrease of approximately 239.5 billion yuan from the end of June. By July 17, the margin balances in Shanghai, Shenzhen, and Beijing had decreased continuously for 12 consecutive trading days, setting a record for the longest consecutive decline in nearly 23 months. During a market uptrend, financing funds can quickly amplify market elasticity. When market volatility increases, financing clients will also deleverage faster, selling off to repay debts or supplement collateral. However, raising the business limit for brokerage firms does not mean that risk control standards are simultaneously relaxed. As early as January, the Shanghai and Shenzhen Stock Exchanges raised the minimum ratio of financing guarantees for investors buying securities on margin from 80% to 100%, reducing the leverage multiples. For brokerage firms, limits management, customer segmentation, collateral conversion rates, maintenance of collateral ratios, and margin call mechanisms all need to be considered together. Credit business flexibility is opened up The impact of margin trading business on brokerage income ultimately manifests in interest income, customer trading activity, and comprehensive wealth management stickiness. However, a more realistic contradiction has emerged in the industry this year: as margin balances increase, income does not necessarily grow proportionally. With brokerage financing rates continuously declining, with some channels already below 3%, the industry is facing pressure of "not increasing revenue with increased increments". Balance expansion provides a basis for scale, but what truly determines profit elasticity is the cost of funds, customer quality, fee levels, and risk losses. From this perspective, GF Securities' adjustment opens up space for future growth. The management still needs to decide specific limits based on market and net capital changes, meaning business advancement will dynamically adjust along with market conditions, customer demands, and risk environment. This article is reprinted from "Finance and Economics Society"; GMTEight Editor: Chen Siyu