Members are urged to strengthen understanding and implementation of the "Detailed Rules on Members' Management of Clients' Securities Trading" and the "Guidelines of Real-time Supervision over SSE Securities Abnormal Trading".
The recent promulgation of the "Detailed Rules on Members' Management of Clients' Securities Trading" and the "Guidelines of Real-time Supervision over SSE Securities Abnormal Trading" (the Two Rules) by the Shanghai Stock Exchange (SSE) aimed at promoting members' client management, strengthening supervision over abnormal securities fluctuation and trading, and exercising members' self-regulation. The "Notice of Promoting Members' Implementation of the Two Rules" (the Notice), issued today by the SSE to all members, specified the requirements in the study, improvement and implementation of the supplementary systems. Members are given a three-month deadline for rationalization before an SSE check on the implementation of the Two Rules.
According to an SSE official, as an important measure to implement the "Rules on Supervision over Securities Companies" and the "Rules on Risk Disposal of Securities Companies", the Two Rules also detailed the implementation of the SSE's "Member Management Rules" and "Trading Rules". In the spirit of "extending the frontier of self-regulation", the Two Rules mainly targeted at strengthening members' management of clients' securities trading and intensifying members' investors education. The Two Rules required members to improve orientation of market rules, understand clients better, intensify risk caution, discover and stop abnormal trading, and cooperate in self-regulation. Meanwhile, the Two Rules also defined the measures the SSE should take in case of abnormal securities price fluctuation or abnormal trading.
To help clients better interpret the Two Rules, the SSE organized online video training. Members and departments of brokerage, proprietary trading, assets management and compliance management related with securities trading should timely organize relevant personnel to watch the video for a thorough knowledge of the systems and measures of the Two Rules.
According to the requirements of the Two Rules, the Notice defines the measures and systems yet to be established and perfected soon by members, including "One System" and "Five Rules". The "One System" refers to the securities trading supervision system, while the "Five Rules" are rules of securities trading supervision, client's trading dispute settlement, self-regulation, investors education and clients classification.
The SSE official stresses that the target is not to establish systems and rules but to fully utilize the system in discovering client's abnormal trading and to implement the management requirements of the rules. Therefore, members are required to rationalize at three-month notice since the issuance of the Notice, prior to an inspection by the SSE. For members that outperform others in implementing the Two Rules, the SSE will submit suggestion letters on self-regulatory supervision to the China Securities Regulatory Commission for raising their classification rating scores. Likewise, the SSE will, according to the "Member Management Rules", take relevant regulatory measures or disciplinary punishment on members with poor performance.
