On Convertible Bonds (Ⅱ)

Editor’s Note: Recently, many investors have consulted about the convertible bonds issued to unspecified objects (hereinafter referred to as convertible bonds) through the investor service hotline of Shenzhen Stock Exchange (400-808-9999). In order to help investors further understand the relevant regulations, the Institute has sorted out the questions that investors have concentrated on consulting for investors’ reference.

1. What are the disclosure rules of the public information about the matching transaction of convertible bonds?

A: According to the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading in Shenzhen Stock Exchange, on the first day of listing of convertible bonds, Shenzhen Stock Exchange announced the names of the five member securities business departments or marketing unit with the largest buying and selling amount on the matching transaction day and their respective buying and selling amounts.

After the first day of listing, under any of the following circumstances, the Shenzhen Stock Exchange will announce the names of the five member securities business departments or marketing unit and their respective buying and selling amounts on that day:

(1) The top five convertible bonds whose closing price rose or fell by 15% on that day;

(2) The top five convertible bonds with a price amplitude of 30% on that day.

The calculation formula of price amplitude is: price amplitude = (highest price of the day-lowest price of the day)/lowest price of the day ×100%.

If the closing price rises or falls or the price amplitude is the same, it shall be selected according to the transaction amount and volume in turn.

2. What happened to the matching transaction of convertible bonds, which was an abnormal fluctuation?

A: According to the relevant provisions of the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading in Shenzhen Stock Exchange, the matching transaction of convertible bonds is an abnormal fluctuation under any of the following circumstances. The Shenzhen Stock Exchange respectively announces the names of the five member securities business departments or marketing unit with the largest cumulative buying and selling amount during the abnormal fluctuation period, and their respective cumulative buying and selling amounts:

(a) within three consecutive trading days, the deviation value of the daily closing price has reached 30%;

The calculation formula of the deviation value of closing price fluctuation is: the deviation value of closing price fluctuation = the fluctuation of single convertible bond-corresponding to the fluctuation of Shenzhen convertible bond index.

If the price reaches the price limit, the corresponding price limit ratio shall be taken for calculation.

(2) Other circumstances identified by the CSRC or Shenzhen Stock Exchange as abnormal fluctuations.

The abnormal fluctuation index shall be recalculated from the next trading day announced by Shenzhen Stock Exchange or the date of resumption of trading. The first day of listing of convertible bonds is not included in the calculation of abnormal fluctuation index.

3. What happened to the matching transaction of convertible bonds, which was a serious abnormal fluctuation?

A: In any of the following circumstances, the matching transaction of convertible bonds is a serious abnormal fluctuation. The Shenzhen Stock Exchange publishes information such as the statistics of investors’ classified transactions during the period of serious abnormal fluctuation:

(1) Abnormal fluctuations in the same direction as stipulated in Article 21 of the Detailed Rules for the Trading of Convertible Corporate Bonds of Shenzhen Stock Exchange have occurred three times in ten consecutive trading days;

(2) The deviation value of the daily closing price has accumulated to+100% (-50%) within ten consecutive trading days;

(3) The deviation value of the daily closing price has accumulated to+200% (-70%) within 30 consecutive trading days;

(4) Other circumstances identified by the CSRC or Shenzhen Stock Exchange as serious abnormal fluctuations.

If there are more than two kinds of serious abnormal fluctuations in the matching transaction of convertible bonds, the Shenzhen Stock Exchange will announce them together.

In case of serious abnormal fluctuations in convertible bonds trading, Shenzhen Stock Exchange may strengthen the monitoring of abnormal transactions according to market conditions and require members to take effective measures to remind customers of risks.

The index of serious abnormal fluctuation is recalculated from the next trading day or the date of resumption of trading announced by Shenzhen Stock Exchange. The first day of listing of convertible bonds is not included in the calculation of serious abnormal fluctuation index.

4. What measures can Shenzhen Stock Exchange take in case of abnormal fluctuations in convertible bonds trading?

A: According to the relevant provisions of the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading of Shenzhen Stock Exchange, Shenzhen Stock Exchange can take the following measures according to the degree of abnormal fluctuations and regulatory needs:

(1) Requiring the listed company to disclose the announcement of abnormal fluctuation of convertible bonds;

(2) Require the listed company to suspend trading for verification and disclose the verification announcement;

(3) Prompting the market of the investment risk of convertible bonds with abnormal fluctuations;

(4) Compulsory intraday suspension of convertible bonds;

(5) Other measures deemed necessary by Shenzhen Stock Exchange.

5. How is the trading time stipulated for negotiation and after-hours pricing of convertible bonds?

A: According to the relevant provisions of the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading in Shenzhen Stock Exchange, if the convertible bonds are traded by negotiation, the trading time is from 9:15 to 11:30 and from 13:00 to 15:30 every trading day.

If after-hours pricing is adopted, the trading time is from 15:05 to 15:30 every trading day.

6. During the suspension of convertible bonds, does Shenzhen Stock Exchange accept the declaration of negotiation or after-hours pricing?

A: According to the relevant provisions of the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading in Shenzhen Stock Exchange, the Shenzhen Stock Exchange will not accept the declaration of the convertible bonds that are suspended all day, during the temporary suspension period or suspended until the closing.

For convertible bonds that are suspended or closed all day, the Shenzhen Stock Exchange will not accept the declaration of after-hours pricing transactions.

7. Is there any minimum requirement for negotiation and after-hours pricing of convertible bonds?

A: According to the relevant provisions of the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading in Shenzhen Stock Exchange, if the convertible bonds are concluded by negotiation and after-hours pricing, the number of single transactions shall not be less than 500,000 yuan, or the transaction amount shall not be less than 500,000 yuan.

8. What is the effective declared price range of convertible bonds?

A: According to the relevant provisions of the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading in Shenzhen Stock Exchange, on the first day of listing of convertible bonds, the declared price of negotiated transactions is determined within 30% of the issue price. Except for the first day of listing, the declared price of negotiated transactions shall be determined within the range of ceiling price’s price fluctuation on that day.

9. Are the negotiated transactions and after-hours pricing transactions of convertible bonds included in the calculation of the real-time market and index of Shenzhen Stock Exchange?

A: According to the relevant provisions of the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading in Shenzhen Stock Exchange, the negotiated transaction and after-hours pricing transaction are not included in the calculation of the real-time market and index of Shenzhen Stock Exchange, and the transaction volume is included in the total turnover of the convertible bonds on that day after the negotiated transaction and after-hours pricing transaction are completed.

10. Is there a special logo for the short name of the convertible bonds on the last trading day?

A: According to the relevant provisions of the Detailed Rules for the Implementation of Convertible Corporate Bonds Trading in Shenzhen Stock Exchange, the initials of convertible bonds on the last trading day are "Z". The listing of listed companies’ stocks is terminated due to the forced delisting of transactions, except that the convertible bonds issued to unspecified objects are terminated.

11. If the Shenzhen Stock Exchange receives applications from convertible bond holders for trading, re-custody, share conversion and resale at the same time on the same day, in what order shall they be handled?

A: According to Article 32 of the Guidelines for Self-regulation of Listed Companies of Shenzhen Stock Exchange No.15-Convertible Corporate Bonds, if you receive two or more business applications from holders of convertible bonds in the same trading day, such as transaction or transfer, transfer custody, share conversion and resale, the applications shall be processed in the order of transaction or transfer, resale, share conversion and resale custody.

12. What is the handling fee for convertible bonds?

A: According to the relevant provisions of the Notice on Charge Standards for Convertible Corporate Bonds, the handling fee for convertible bonds is charged bilaterally at 0.04‰ of the transaction amount.

(Disclaimer: This question and answer column is only published for the purpose of investor education and does not constitute investment advice. Investors operate accordingly at their own risk. Shenzhen Stock Exchange strives for the accuracy and reliability of the information involved in this question and answer, but does not guarantee its accuracy, completeness and timeliness, and does not assume responsibility for the losses caused by using this question and answer. )