Upon approval by the China Securities Regulatory Commission, the Shanghai Stock Exchange (SSE) has amended some articles about trading participants in the “SSE Trading Rules” (the “Trading Rules” for short) and the “SSE Detailed Implementation Rules for Participants Business Units (PBUs)” (the “Implementation Rules” for short), in a bid to propel implementation of the pilot program of the Shanghai-Hong Kong Stock Exchanges Connectivity Mechanism (SHSECM). Details of the amendments are as follows:
I. Amendments to relevant articles of the “Trading Rules”
1. The stipulation on trading participants’ getting seats is deleted.
The Article 2.2.1 is amended as follows:
“Organizations approved by the SSE and SSE members shall apply for getting the trading right to the SSE and become the SSE’s trading participants before trading securities on the SSE market.
Trading participants shall trade securities through PBUs set up on the SSE and abide by relevant stipulations of securities trading business in the Rules and the SSE’s other business rules.”
2. Order submission matters of trading participants are supplemented.
(1) The Article 3.1.2 is amended to “Trading participants shall submit buying and selling orders to the SSE trading host through relevant offer system, PBUs and submission channels, and reach transactions according to the Rules, while the SSE shall send trading results and other trading records to the trading participants.”
(2) The Article 3.1.3 is amended to “Trading participants shall properly take care of entrustment and submission records according to relevant regulations”.
(3) The Article 3.4.1 is amended as follows:
“Time for the SSE to receive trading participants’ submissions in auction trading is 09:15 to 09:25, 09:30 to 11:30 and 13:00 to 15:00 every trading day.
The SSE’s trading host shall not receive submission of order cancellation from 09:20 to 09:25 (the time for open call auction) of each trading day; any submitted orders without transaction reached within other time intervals for receiving trading submissions could be cancelled, while such cancellation orders shall be confirmed by the SSE’s trading host before becoming valid.
The SSE, if necessary, could adjust the time intervals for receiving trading submissions.”
(4) The Article 3.4.3 is amended to “The SSE receives limit orders and market orders from trading participants”.
(5) The Article 5.2.4 is amended to “Real-time quotation is transferred to trading participants through the communication system, and they shall use it within the scope approved by the SSE”.
3. Supervision and management matters relating to trading participants are supplemented.
(1) The Article 6.4 is amended to “SSE members and their business departments, other trading participants and investors shall cooperate with the SSE for investigations, and provide relevant documents and materials in a timely, real, accurate, and complete way.”
(2) The Article 8.2 is amended to “The SSE may provide indispensable trading data according to relevant regulations for any trading dispute between two trading participants or between a SSE member and its client.”
(3) The Article 9.2 is amended to “Trading participants shall pay trading handling fee and other fees to the SSE according to relevant regulations; SSE members shall pay membership fee to the SSE according to relevant regulations.”
(4) The Article 10.1 is amended to “If SSE members and other trading participants fail to abide by the Rules, the SSE shall order them to make rectifications and, in light of circumstances, impose additional punishments, or main punishments plus additional punishments as follows:
a. a criticism notice;
b. a public condemnation;
c. suspension or limitation of trading authority;
d. cancellation of the qualification of trading participant; and
e. cancellation of the qualification of SSE member.
(5) The Article 10.2 is amended to “If SSE members and other trading participants hold dissents to the punishments mentioned in the above items b, c, d, and e, they could apply for review to the SSE’s Board of Governors within 15 days after receiving a notice of punishment. During the review period, execution of relevant punishments shall not be halted”.
II. Amendments to relevant articles of the “Implementation Rules”
The Clause 2 in Article 5 in the “Implementation Rules” is deleted, and is amended to “A trading participant can trade securities on the SSE market only after setting up a trading unit.”
The above amendments shall take effect from the date of issuance.