Rules released to curb warrant speculation

By Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2007-07-09 15:22

China's stock exchanges have released a series of measures to tightly supervise warrant trading, according to a report from China Securities News.

According to the measures released by the Shenzhen Stock Exchange, one of China's two stock exchanges, investors' warrant accounts involved in severely abnormal trading will be locked for as long as 15 trading days.

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The Shanghai Stock Exchange also sent letters to securities companies related to large trading volumes of warrants and ordered them to strengthen regularities.

The Shenzhen exchange also sent warnings to warrant traders and securities companies involved in abnormal trading actions. The exchange also put a temporary trading suspension system and a risk warning system in to practice.

The Shanghai exchange also ordered securities companies to strengthen management on their customers and report suspected trading to the exchange.

Some major warrant traders concerned with illegal trading should be reported to the China Securities Regulatory Commission for examination in line with relevant procedures, according to the Shanghai exchange.

The Shenzhen exchange also warned investors of the risk of warranty investment.

Statistics show that from May 30 to June 29 this year, a total of 617,800 investors involved in trading four put warrants suffered losses, accounting for more than 50 percent of the total number of warrant investors.


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