Measures of Clearing of the Pledge-style Repurchase Transactions of Bonds Temporarily Suspended from Listing

 2018-06-24  47


  • Document NumberNo. 100 [2017] of the China Securities Depository and Clearing Corporation Limited
  • Area of LawSecurities
  • Level of AuthorityIndustry Regulations
  • Date issued07-21-2017
  • Effective Date01-22-2018
  • StatusEffective
  • Issuing AuthorityChina Securities Depository & Clearing Corporation Limited

Notice of the China Securities Depository and Clearing Corporation Limited on Issuing the Interim Measures of the China Securities Depository and Clearing Corporation Limited for the Clearing of the Pledge-style Repurchase Transactions of Bonds Temporarily Suspended from Listing
(No. 100 [2017] of the China Securities Depository and Clearing Corporation Limited)
All relevant market participants:
For the purposes of regulating the clearing of the pledge-style repurchase transactions of bonds temporarily suspended from listing (hereinafter referred to as the “repurchase transactions”) and guaranteeing the safe and stable operation of the securities depository and clearing system, in accordance with the Securities Law, the Measures for the Administration of the Securities Depository and Clearing and other provisions, the China Securities Depository and Clearing Corporation Limited has developed the Interim Measures of the China Securities Depository and Clearing Corporation Limited for the Clearing of the Pledge-style Repurchase Transactions of Bonds Temporarily Suspended from Listing, which are hereby issued and shall come into force on January 22, 2018. Please effectively make relevant business and technical preparations according thereto.
Annex: Interim Measures of the China Securities Depository and Clearing Corporation Limited for the Clearing of the Pledge-style Repurchase Transactions of Bonds Temporarily Suspended from Listing
July 21, 2017
Annex:
Interim Measures of the China Securities Depository and Clearing Corporation Limited for the Clearing of the Pledge-style Repurchase Transactions of Bonds Temporarily Suspended from Listing
Article 1 For the purposes of regulating the clearing of the pledge-style repurchase transactions of bonds temporarily suspended from listing and guaranteeing the safe and stable operation of the securities depository and clearing system, these Measures are developed in accordance with the Securities Law, the Measures for the Administration of the Securities Depository and Clearing and other laws and regulations, departmental rules and other provisions, as well as the relevant business rules of the China Securities Depository and Clearing Corporation Limited (“CSDC”).
Article 2 The clearing for the pledge-style repurchase transactions of the involved bonds that are temporarily suspended from listing by the Shanghai Stock Exchange, the Shenzhen Stock Exchange, and the National Equities Exchange and Quotations (hereinafter collectively referred to as the “transaction venues”) under the relevant provisions and that may be normally operated in the securities depository and clearing system of the CSDC shall be governed by these Measures, unless as otherwise prescribed by the CSDC.
For the purposes of these Measures, pledge-style repurchase transactions of bonds (hereinafter referred to as the “repurchase transactions”) means the repurchase transactions that are listed on the transaction venues, that are conducted under the standard bonds system, and for which multilateral netting is adopted.
Article 3 Under the circumstance that all securities transactions are suspended all day on the original normal transaction days at the transaction venue (hereinafter referred to as the “all-day temporary suspension from listing”), the CSDC shall postpone the clearing for the repurchase transactions expiring on the day of all-day temporary suspension from listing, and accordingly postpone the relevant settlement.
Article 4 Under the circumstances of normal transaction during some trading sessions on the originally determined normal transaction days at the transaction venue and temporary suspension of all securities transactions during some trading sessions (hereinafter referred to as the “day-time temporary suspension from listing”), the CSDC shall handle the repurchase transactions in a differentiated manner under the specific circumstance of the day-time temporary suspension from listing and other circumstances. The main measures include:
(1) Where, under the circumstance that the transaction is resumed on the current day of day-time temporary suspension from listing, relevant transaction lasts for at least two hours after resumption until closing of the original normal transaction (where the closing time is postponed by the transaction venue, at least two hours of continuous transaction hours are required before the closing time), the clearing and settlement of the repurchase transaction shall be handled normally on the current day.
(2) Under other circumstances of day-time temporary suspension from listing, the clearing for the repurchase transactions newly concluded and expired on the current day of suspension from listing, relevant settlement shall be accordingly postponed, and the beginning day of repurchase for the newly concluded repurchase transaction on the current day shall be the initial clearing day.
Article 5 In the event of insufficiency and overdraft of a clearing participant during the period of delayed clearing and settlement as the clearing and settlement is delayed by the repurchase transactions at the time of temporary suspension from listing, the CSDC shall not incorporate it into the default of the clearing participant, but shall collect the interests of the relevant overdrafted funds during the overdraft period from the clearing participant.
Article 6 Under the circumstance that the fund receiver of a repurchase transaction postpones repayment of funds due to temporary suspension from listing, the fund receiver of a repurchase transaction shall appropriately compensate the fund provider of a repurchase transaction, and the amount of compensation shall be calculated according to the repurchase interest rate at which the initial transaction is concluded, the time postponed for repayment of funds, and other information. The relevant agreement signed by and between the clearing participant and the CSDC, and between the clearing participant and the investor shall clarify the relevant compensation arrangements according to these Measures or reach overall agreement on compliance with the relevant business rules developed by the CSDC.
Article 7 The specific arrangements for the repurchase transactions at the time of temporary suspension from listing shall be announced by the CSDC in a timely manner after the announcement for temporary suspension from listing is issued at the transaction venue.
Article 8 The clearing participants shall pay close attention to the transaction venues, and the announcements issued by the CSDC on the clearing response arrangements for temporary suspension from listing, resumption of transactions, and repurchase transactions, among others. For the relevant clearing arrangement for repurchase transactions in response to temporary suspension from listing, a clearing participant shall improve the risk management system, and effectively prevent relevant liquidity risks and legal risks, including but not limited to:
(1) The clearing participant shall notify the investors of the relevant information such as temporary suspension from listing and resumption of transactions in a timely manner, and mainly remind the investors participating in the repurchase transactions of preventing liquidity risks. After an announcement on temporary suspension from listing is issued at the transaction venue, measures shall be taken in a timely manner to prevent from incorporating an investor's funds receivable in transit generated on the current day of temporary suspension from listing due to expiry of repurchase transaction or newly concluded repurchase transaction into the investor's available fund position. After an announcement on the resumption of transaction for the day-time temporary suspension from listing is issued at the transaction venue, a clearing participant shall notify the investors to handle the continuation of the repurchase transaction required to be completed and other transactions in a timely manner. Overdraft and other circumstances caused by a clearing participant's failure to take measures in a timely manner to prevent an investor's use of the funds receivable in transit and failure to notify an investor in a timely manner to handle the continuation of the repurchase transaction required to be completed shall not be incorporated into the circumstances of default waiver as prescribed in Article 5 of these Measures.
(2) The clearing participant shall assume the ultimate settlement liability for the CSDC for an investor's funds payable for repurchase, including but not limited to the funds payable on the original normal maturity date, compensation for delayed occupation of repurchase funds due to temporary suspension from listing, etc. For the liquidity risks that investors may face due to temporary suspension from listing, compensation for delayed occupation of repurchase funds and other matters, the clearing participant shall disclose risks to investors in advance and specify their respective responsibilities and obligations by contract, agreement and other means.
Article 9 An investor shall pay close attention to the transaction venues, and the announcements issued by the CSDC on the clearing response arrangements for temporary suspension from listing, resumption of transactions, and repurchase transactions, among others, and the relevant information provided by the clearing participant, and shall effectively complete the relevant liquidity risk management and other work, including but not limited to:
(1) After an announcement on temporary suspension from listing is issued at the transaction venue, an investor shall stop using the funds receivable in transit generated from the maturity of the repurchase transaction or newly concluded repurchase transaction on the current day of temporary suspension from listing in a timely manner.
(2) After an announcement on the resumption of transaction for the day-time temporary suspension from listing is issued at the transaction venue, an investor shall handle the continuation of repurchase transaction required to be completed and other transactions in a timely manner, to avoid overdraft when the clearing arrangements for repurchase transactions are implemented under paragraph 1 of Article 4 of these Measures.
Article 10 Where the CSDC is unable to implement the relevant arrangements in response to temporary suspension from listing under these Measures, due to the relevant reasons leading to temporary suspension from listing, fault in the securities depository and clearing system of the CSDC or inability of the transaction venue to normally conduct day-end processing on the day of day-time temporary suspension from listing, and other circumstances, it shall be otherwise prescribed.
Where the relevant arrangements for the repurchase transactions at the time of temporary suspension from listing cause losses to the relevant market participants, the CSDC shall not assume any legal liability.
Article 11 These Measures shall be subject to the interpretation by the CSDC.
Article 12 These Measures shall come into force on January 22, 2018.