In order to further improve the trading system, the Shanghai Stock Exchange (SSE) has revised and issued the "SSE Administrative Measures for Trading of Stocks on Risk Alert Board" (the "Administrative Measures" for short), which shall take effect upon issuance. This revision focuses on improving the measures for the intraday temporary trading suspension and the limit to the quoted price for the previously delisted stocks on their first day of relisting. As major changes may take place in the fundamentals of the previously delisted company, coupled with no price limit on the first day of re-listing, the re-listed stocks are likely to see the share prices fluctuate significantly on the first trading day. The revision aims to reduce trading barriers and unnecessary interventions, enhance market liquidity, and ensure adequate trading of the re-listed stocks. The adjusted measures follow the practice of the SSE STAR Market, namely no price limit for the first 5 trading days since the listing of the stock. Specific adjustments are as follows:
First of all, the specific circumstances of intraday temporary trading suspension are adjusted for the relisted stocks on the first day of listing. According to the adjustments, the intraday temporary trading suspension shall be implemented when the rise or fall in the intraday trading price reaches or exceeds 30% and 60% of the opening price for the first time on the first trading day. In the case of "intraday turnover rate reaching or exceeding 30%" stipulated in the original rule, the intraday temporary trading suspension will not be enforced.
Secondly, new rules are added for the time for temporary trading suspension, the issuance of announcements and some other aspects. According to Article 10 added in the revised "Administrative Measures", the intraday temporary trading suspension shall last for 10 minutes. During the trading suspension, orders can be placed or cancelled. When the trading is resumed, the accepted orders will be matched through call auction. Article 11 is added to stipulate the matters concerning the announcements on the intraday temporary trading suspension. Article 12 is added to define the price limits to the limit orders of the relisted stocks during the continuous auction on the first day of listing, and it provides that the quoted price of buy order shall not be higher than 102% of the benchmark bid price, and the quoted price of the sell order shall not be lower than 98% of the benchmark ask price. There is no price limit to the orders during the call auction and the intraday trading suspension.
Attachment: Notice of Revising the "SSE Administrative Measures for Trading of Stocks on Risk Alert Board"