Shanghai Stock Exchange, Implementing Rules for Bond Transactions

Promulgated: February 6 2006
Effective: May 8 2006
Interpreting authority: Shanghai Stock Exchange (Stock Exchange)
Applicability: These Rules apply to spot transactions and collaterized form of repurchases of treasury bonds and enterprise bonds (collectively, Bonds). Where matters are not covered by these Rules, trading rules and other relevant provisions of the Stock Exchange shall prevail. Buyout Bond repurchase trading shall be provided separately by the Stock Exchange (Article 2). Spot transactions and collaterized form of repurchases of Bonds (Bond Repurchase Transactions) may be carried out in such forms as centralized bidding, continuous bidding and block trade (Article 3). Securities business institutions with membership qualification with the Stock Exchange (Members) may carry out Bond brokerage business or business for their own account on the markets of the Stock Exchange
(Article 4). For spot transactions, Bonds may be purchased and sold on the same day (Article 7). For centralized price competition of spot transactions of Bonds, the minimum price fluctuation unit submitted shall be Rmb0.01 (Article 10). Repurchase transactions of treasury bonds shall be submitted through securities accounts, and repurchase transactions of enterprise bonds shall be submitted through seats (Article 12). A collateral vault system shall be implemented for Bond Repurchase Transactions whereby the financier shall, prior to submission of a repurchase, submit via the Stock Exchange's transaction system the corresponding Bonds as collaterals (Article 13). Members accepting entrustment of Bond Repurchase Transactions from investors shall require investors to submit collateral securities, and carry out examination on the balance of standard securities in their securities accounts that may be used in bond repurchase. Where the balance of standard securities is insufficient, the submission of Bond repurchase shall become void (Article 14). Bonds purchased may be used for submission of collateral Bonds on the same day, and corresponding Bond Repurchase Transactions may be carried out (Article 16). For centralized price competition of Bond Repurchase Transactions, the minimum price fluctuation unit submitted shall be Rmb0.005 dollars or its integral multiples (Article 18).
Related legislation: Shanghai Stock Exchange, Trading Rules