The "SSE Detailed Rules for Designated Trading", issued by the Shanghai Stock Exchange (SSE) yesterday, made modifications to the "Trial Measures on Overall Designated Trading System" issued in 1997 in line with the newly implemented "Trading Rules" (implemented on July 1, 2006) and the "Detailed Rules for Implementation of PBUs" (implemented on May 8, 2007). The new "Rules" will be implemented as of today (May 15, 2007), with the "Trial Measures" abolished at the same time.
According to an SSE official, in the past decade since the issuance of the "Trial Measures", great changes have taken place on the securities market. The investors' investment concept has become mature and the members' self-regulation awareness has been strengthened. Moreover, the social and legal environment as well as the technological conditions, where the former designated trading system was established to prevent capital embezzlement in securities business, has seen a great change. To better adapt to the changes of the market situation, trading system and relevant rules, the new "Rules" is worked out.
Thanks to SSE's integrated switch of seats and Participants Business Units (PBUs) on May 8 this year, the securities accounts, originally designated to the seats by investors, were switched to the corresponding PBUs.
Compared with the original "Trial Measures", the amended "Rules" will change its restriction target from the securities business departments to business participants, i.e., members as legal persons. By deleting relevant content concerning the securities business departments as designated trading assignees, the "Rules" now regard business participants as designated trading assignees. In line with the "Detailed Rules for Implementation of PBUs", the amended "Rules", in place of the original concept of seats, adopts the new concept of PBUs.
The "Rules" defines designated trading as follows: Any investor with securities trading on the SSE should designate a certain SSE business participant beforehand as the only assignee of his or her securities trading. Then the business participant should participate in the trading through his or her given PBU. Investors can withdraw and change their designated trading if necessary. However, the business participants cannot apply for withdrawing the designated trading if there is trading behavior or order, or there is undue new shares subscription or unauthorized withdrawal because of repos or other unfinished issues on the withdrawal day.