It is understood that the existing issuance conditions of the administrative measures remain basically unchanged, and each sector still applies its own issuance procedures and relevant rules. The new third board will be included in the adjustment scope to provide institutional basis for future market reform and development. At the same time, it also puts forward principled requirements on the appropriateness of investors, trading system, and the rights and responsibilities of issuers and investors, so as to reserve space for perfecting the supporting rules of trading places.
Specifically, there are eight chapters and 37 articles in the administrative measures, mainly including general provisions, issuance conditions and procedures, transaction transfer, information disclosure, share conversion, redemption and resale, protection of rights and interests of convertible bond holders, supervision and management and legal liability, and supplementary provisions.
Lets take a look at the key points:
4. Securities companies shall fully understand customers, check and evaluate whether customers meet the requirements of suitability of convertible bond investors, and shall not accept customers who do not meet the suitability requirements to participate in convertible bond trading. Securities companies should guide customers to participate in convertible bond trading rationally and regularly.
5. Securities trading places should strengthen the risk monitoring of convertible bond trading, establish the monitoring mechanism of cross principal shares and convertible bonds, and formulate targeted abnormal volatility indicators according to the characteristics of convertible bonds. In case of abnormal fluctuation in convertible bond trading, the securities trading place may require the issuer to check and disclose the abnormal fluctuation announcement according to the business rules, fully prompt the risk to the market, and may also take temporary suspension measures according to the business rules.
6. The convertible bonds issued by the issuer to specific objects shall not be transferred by means of open centralized trading. If the convertible bonds issued by a listed company to specific objects are converted into shares, the shares transferred shall not be transferred within 18 months from the date of the end of the issuance of the convertible bonds
7. The issuer shall, in the prospectus or other information disclosure documents of securities issuance, disclose the business model, corporate governance, development strategy, business policies, accounting policies, financial analysis and other information in the prospectus or other information disclosure documents of securities issuance, and fully disclose those that may have significant adverse effects on the companys core competitiveness, business stability and future development Risk factors.
8. In the event of a major event that may have a greater impact on the transfer price of convertible bonds, and the investors have not yet known about it, the issuer shall immediately submit an interim report on the major event to the CSRC and the stock exchange, and make an announcement to explain the cause, current status and possible legal consequences of the event.
9. If the issuer decides to exercise the right of redemption, it shall fully disclose the transaction of convertible bonds of the company by its actual controller, controlling shareholder, shareholders holding more than 5% shares, directors, supervisors and senior managers. The issuer shall disclose the resale announcement after the conditions for resale are met, specify the resale period, procedure, price and other contents, and disclose the announcement of resale results after the end of the resale period.
10. The convertible bonds can be converted into shares of the company six months after the end of the issuance, and the period of conversion shall be determined by the company according to the duration of the convertible bonds and the financial status of the company. The bondholders have the option to convert shares or not, and become shareholders of the Issuer on the day after the conversion.
11. The conversion price of convertible bonds issued to non-specific objects shall not be lower than the average trading price of the issuers stocks 20 trading days before the announcement date of the prospectus and the average price of the previous trading day, and shall not be revised upward.
12. Where convertible bonds are issued to unspecified objects, the issuer shall employ a bond trustee for the bondholders and enter into a bond trustee agreement. Where convertible bonds are issued to specific objects, the issuer shall specify the entrusted management of bonds in the prospectus.
13. The prospectus may stipulate the sale back clause, which stipulates that the bondholder may sell back the bonds to the issuer according to the conditions and prices agreed in advance. The prospectus shall stipulate that if the issuer changes the purpose of the raised funds, the bondholders shall be given the right of one-time repurchase. The prospectus may stipulate the terms of redemption and stipulate that the issuer may redeem the convertible bonds which have not been converted into shares at the agreed terms and prices.
14. The issuer shall specify in the prospectus of the bonds the circumstances constituting the default of the bonds, the liability for breach of contract and the mode of undertaking the breach, as well as the litigation, arbitration or other dispute settlement mechanisms after the default of convertible bonds.
15. The bond offering prospectus shall stipulate the rules for the bondholders meeting. The rules of bondholders meeting shall be fair and reasonable. The rules of bondholders meeting shall specify the scope of rights exercised by bondholders through the bondholders meeting, the mechanism for convening, notifying and making decisions of bondholders meetings and other important matters.
Shanghai and Shenzhen Stock Exchange
The Shenzhen Stock Exchange said on October 23 that recently, the convertible bond market has been actively traded, and the prices of some convertible bonds have seriously deviated from the companys share price. In the next step, Shenzhen Stock Exchange will continue to implement the nine character policy of system building, non intervention and zero tolerance, continue to do a good job in transaction supervision, strengthen joint supervision of trading and information disclosure, study and improve the convertible bond trading system including temporary suspension of trading, effectively prevent market risks, effectively maintain market trading order, and fully protect the legitimate rights and interests of investors.
Retail investors: heavy losses
The sickle fell before the closing. At the end of the day, many convertible bonds plunged sharply. The 20% decline of Wanli convertible bonds, Kyushu convertible bonds and Haer convertible bonds triggered a temporary suspension. 24 convertible bonds fell more than 10%, and only 4 convertible bonds rose more than 10%. On the morning of the 23rd, Yinhe convertible bonds, which rose by more than 116%, fell by 3.86% in the end. Compared with the intraday high, Yinhe convertible bond fell by 55.68%.
Some netizens said in the post bar, todays 100000 Jin Jin will not play again after losing 60000 yuan.. Another netizen posted the transaction record shows that his account traded more than one convertible bond. Among them, the floating loss of Yinhe convertible bonds alone exceeded 100000 yuan, with a loss margin of more than 40%. More investors in the stock bar said, a day lost a suite, he also posted a stock account, the account shows that the loss of more than 260000 positions.
In terms of turnover, the convertible bond market just broke through 100 billion yuan for the first time in history on the 22nd, and then exceeded 100 billion yuan in half day trading on October 23. The trading volume continued to expand in the afternoon, with the whole day trading volume approaching 200 billion yuan. The plate index also hit an all-time high of 1184.5 today.
Looking back on this weeks crazy convertible trend, some market participants pointed out that there were obvious signs of fund speculation in convertible bonds. Funds switched back and forth between different convertible bonds, chasing up and down. Speculation was similar to beating drums and spreading flowers, making full use of the T + 0 rule. The recent active varieties of convertible bonds generally have two characteristics: first, the scale is small, most of them are below 300 million yuan; second, the risk of short-term forced redemption is small.
Facing the irrational operation of the market, regulators and listed companies have warned of risks. The listed companies were intensively questioned. On the evening of October 22, the Shenzhen Stock Exchange issued a letter of concern to Zhengyuan wisdom, the principal stock of Zhengyuan convertible bonds, requiring the company to analyze in detail the reasons why the price of convertible bonds increased greatly on October 22 and deviated greatly from the price trend of principal stocks in combination with the price trend of stocks and convertible bonds of Listed Companies in the same industry.
Zhengyuan wisdom immediately announced on the evening of 22nd that the trading of the companys shares and convertible bonds will be suspended from the opening of the market on October 23, 2020. The company will conduct necessary verification on related matters of recent secondary market transactions, and resume trading after the company has completed the relevant verification work and disclosed the verification results.
After trading on the 23rd, Yinhe, the main stock of Yinhe convertible bonds, issued the announcement on the fluctuation risk of convertible company bond trading, which analyzed the reasons for the large changes of bonds and revealed the risks to investors. Subsequently, intelligent control, wanlima and other companies have also issued risk warnings on convertible bonds. Today, some investors have received short messages from securities companies asking them to sign a new risk disclosure statement before October 26 to participate in the purchase and trading of convertible bonds, otherwise they will not be able to participate in the transaction.
From October 26, the new regulations on convertible bonds issued by Shanghai and Shenzhen stock exchanges will be implemented. This is a big signal for the regulatory authorities to strengthen investor education and hope to curb the trend of blind speculation. It does not rule out the possibility that funds will rush to increase the shipment before the new regulations are implemented.