Shenzhen Branch of the China Securities Depositary and Clearing Corporation Limited, Registration of the Pledges of Shares of Securities Companies Operational Guidelines

Issued: 2 November 2001
Effective: 12 November 2001
Interpreting authority: Shenzhen Branch of the China Securities Depositary and Clearing Corporation Limited
Applicability: For the purposes of these Guidelines, "registration of a pledge of shares" means registration of shares pledged in favour of a commercial bank by a securities company or a securities investment fund (Article 2).

Main contents: According to the Guidelines, commercial banks and securities companies must satisfy the qualification requirements specified in the Administration of Loans Secured by the Pledge of Securities Companies' Shares Procedures if they want to enter into a loan agreement backed by a pledge of shares, and the shares so pledged must also meet the requirements therein (Articles 3 and 4). Banks that conduct such business must also have special seats on Shenzhen Stock Exchange (Article 6). Application for registration of pledged shares and their release from pledge must be made through the trading system of the stock exchange (Article 15). Upon confirmation of the registration, the relevant shares are transferred from the securities company to the bank, where the pledge is effected, or from the bank to the securities company, where the pledge is released (Articles 16 and 19).

Related legislation: PRC, Securities Law, Dec 29 1998, CLP 2006 No.1 p31 and Administration of Loans Secured by the Pledge of Securities Companies' Shares Procedures, Feb 2 2000, CLP 2000 No.5 p7

Repealed legislation: Shenzhen Stock Exchange, Registration of Shares Pledges of Securities Companies Implementing Rules, 2000