Securities Exchange Service Process

1、 The process of converting large bonds

1. Telephone communication, meeting communication, email communication (confirm requirements)

2. Bring the responsible person and operator to Shenzhen for a detailed interview (at your own expense)

3. Confirm the authenticity and reliability of arranging the leader to wait for the order (the end time is uncertain)

4. During operation, resources need to be submitted to the organizer for scheduling (requiring high cooperation)

5. Unified arrangement of fee and commission settlement allocation (negotiated and signed in advance)

2、 The process of bond trading

The bond trading process has five steps: account opening, commission, transaction, clearing and delivery, and transfer.

1. Opening an account

To participate in bond trading on a stock exchange, bond investors must first choose a reliable securities company and handle account opening procedures at that company.

After investors sign an account opening contract with a securities company, they can open an account to prepare themselves for bond trading. The accounts allowed to be opened on the Shanghai Stock Exchange in China include cash accounts and securities accounts. The cash account can only be used to purchase bonds and pay the purchase price through this account, while the securities account can only be used to deliver bonds. Due to the fact that investors need to engage in both bond buying and bond selling businesses, they generally need to open both cash and securities accounts.

2. Entrustment

After opening an account with a securities company, in order to truly go public for trading, investors must also handle a securities trading commission relationship with the securities company, which is a necessary procedure for bond trading.

3. Transaction

After receiving effective commissions from investors, securities companies directly transmit them via satellite to the exchange host for matching transactions.

In a stock exchange, bond transactions aim to achieve agreement between the buyer and seller in terms of price and quantity. This procedure must follow a special principle, also known as the bidding principle. The main content of this bidding rule is "three first", which means price first, time first, and customer commission first.

Price priority refers to the securities company buying or selling bonds at a price that is most favorable for the interests of the investment principal; Time priority means that when declaring the same price, transactions should be made with the party who first proposed the price; Customer commission priority mainly requires securities companies to first engage in agency buying and selling between self operated and agency buying and selling.

4. Clearing and delivery

After the bond transaction is completed, the delivery of the bond payment must be carried out, which is the clearing and delivery of the bond.

The liquidation of bonds refers to offsetting the purchase and sale of the same type of bond on the same delivery date, determining the number of bonds to be delivered and the amount of price to be delivered, and then handling the delivery of bonds and prices according to the principle of "net settlement".

The delivery of bonds involves handing over the bonds from the seller to the buyer, and handing over the price from the buyer to the seller.

Bonds traded on stock exchanges can be divided into three types based on delivery dates: daily delivery, regular daily delivery, and agreed daily delivery. At present, the Shenzhen and Shanghai Stock Exchanges stipulate delivery on the same day. Delivery on the same day refers to the handling of bond delivery procedures on the day of transaction.

5. Transfer of ownership

After the bond is traded and the delivery procedures are completed, the final step is to complete the transfer of the bond. Transfer of ownership refers to the transfer of ownership of a bond from one owner to another.

The basic procedures for transferring ownership include:

After completing the settlement and delivery, the bond seller shall add an amount equal to the transaction price to their cash account and deduct the same amount of the bond from the securities account.

After completing the settlement and delivery, the bond buyer reduces the price in their cash account and increases the number of bonds in their securities account.

The methods and processes of bond trading

1、 Cash bond trading

Also known as spot trading of bonds, it refers to bond trading in the secondary market where both buyers and sellers of securities complete the settlement procedures after the transaction, where the buyer pays the funds and receives the securities, and the seller delivers the securities and receives the funds. In fact, it is a bond buying and selling behavior.

2、 Repurchase transactions

It refers to the behavior of both the buyer and seller of a bond (the fund receiving party and the fund financing party) agreeing to engage in reverse trading at a certain time in the future at a predetermined price during the transaction.

technological process

1. Repurchase trading is a way of pledging loans, usually on government bonds

2. Investors benefit from price differences

3. From the perspective of operation mode, it combines the characteristics of spot trading and forward trading, and is usually used in bond trading

4. It is an ultra short-term financial instrument with the attribute of short-term financing

3、 Forward transactions

Forward trading is the act of both parties agreeing to buy and sell the underlying bond at a certain future time (or period of time) at a price determined now

4、 Futures trading

It refers to the standardized forward trading conducted by the exchange, which refers to the trading of futures contracts by both parties in a centralized market through open bidding.

5、 The main methods of bond quotation

Public quotation

Dialogue quotation

Bilateral quotation

Small quotation

6、 Bond trading process

1. Opening an account

2. Transaction

Price priority, time priority, customer commission priority

3. Liquidation

Net settlement

4. Delivery

7、 Relevant regulations on bond registration, custody, redemption, and interest payment

Bond registration

It refers to the act of a bond registration and settlement institution to establish and maintain a roster of bondholders for bond issuers, which is the recording and confirmation of securities elements and securities powers

Bond Custody

The Central treasury bond Securities Depository and Clearing Co., Ltd. (CDC), Inter bank Market clearing house Co., Ltd. (Shanghai clearing house) and China Securities Depository and Clearing Corporation (CSDCC) are the custodian institutions of bonds

Bond redemption

Five redemption methods: maturity redemption, early redemption, bond replacement, installment redemption, and conversion to common stock redemption

Bond interest payment

Three types of interest payment methods: coupon method (coupon cutting method), discount interest, and principal interest combination method