China Securities Association launches stress tests for securities firms in 2024

On April 5th, the China Securities Association recently launched the 2024 stress testing work for securities companies. It is reported that this stress test includes two parts: comprehensive stress test and over-the-counter derivative business stress test, the same as in previous years. The testing objects and objectives, risk factors and scenario assumptions, as well as testing requirements, are basically consistent with previous years. It should be noted that in this derivatives business test, China Securities coordinated the study of how securities firms can cope with significant capital outflows in over-the-counter derivatives business, and conducted research on the scale of securities firms' long short return swap business and the risk situation under given stress scenarios. In addition, similar to previous years, the China Securities Regulatory Commission requires securities firms to conduct knock in stress tests on the company's snowball products.