Legislation roundup: Shanghai Trading Rules, liquidity risks and renminbi settlements
November 15, 2013 | BY
clpstaff &clp articles &The Shanghai Stock Exchange has released revised Trading Rules and the CBRC has issued Trial Measures over the liquidity risks of commercial banks. The People's Bank also released a Circular on renminbi settlement for investment in financial institutions by foreign investors
Capital markets
Shanghai Stock Exchange, Trading Rules (Revised in 2013)
According to the revised Trading Rules, day trading, i.e. T+O, is expressly implemented for products such as bond ETFs, tradable money market funds and gold ETFs. Additionally, the revised Rules supplement and revise matters such as innovation in the block trading mechanism, arrangements related to instalment repayment of bonds and the reporting limit for single bond trades.
See the digest for more details.
Further reading
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Banking
China Banking Regulatory Commission, Measures for the Administration of the Liquidity Risks of Commercial Banks (Trial Implementation) (Draft for Comments)
The Draft introduces the liquidity coverage ratio metric and requires commercial banks to have sufficient quality liquid assets so as to ensure that they can promptly satisfy liquidity requirements in stress situations. Quality liquid assets are assets that do not face any obstacles to realisation, and may include liquid assets that, in a stress situation, can be turned into cash through sale or mortgage (pledge).
See the digest for more details.
Further reading
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M&A
People's Bank of China, Circular on Matters Relevant to Renminbi Settlement in Connection with Investment in Financial Institutions in China by Foreign Investors
Where a foreign investor has been granted approval to invest in a financial institution in China, it may make this investment in renminbi. More specifically, this includes new establishments, capital increases, acquisitions, equity participations, equity transfers, profit distributions, liquidations, capital reductions, shareholding divestments and early investment recoveries.
See the full translation.
Further reading
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