Block Trades

Posted By Steve On Monday, May 24th, 2010 With 0 Comments

A securities trade on the Shanghai Stock Exchange can be executed as a block trade if it meets any of the following threshold:

(1) for a single A-share trade, the trading volume is no less than 500,000 shares or the trading value is no less than RMB 3 million Yuan;

(2) for a single B-share trade, the trading volume is no less than 500,000 shares or the trading value is no less than USD 300,000;

(3) for a single mutual fund trade, the trading volume is no less than 3 million units or the trading value is no less than RMB 3 million Yuan;

(4) for a single treasury bond trade or bond repo trade, the trading volume is no less than 10,000 round lots or the trading value is no less than RMB 10 million Yuan; or

(5) for any other type of a single bond trade, the trading volume is no less than 1,000 round lots or the trading value is no less than RMB 1 million Yuan.

The Exchange may adjust the threshold on block trades in line with market conditions.

The Exchange trading system accepts block trading orders during 9:30-11:30 and 13:00-15:30 on each trading day.

Block trading orders are classified into intent orders and execution orders.
An intent order shall include such information as securities account number, securities code, and buy or sell, etc.

An execution order shall include such information as securities code, securities account number, buy or sell, execution price, and trading volume, etc.

An intent order shall be true and valid. In case the price of an intent order is not specified, it is deemed that the party who has placed such order is at least willing to buy at the prescribed lowest price or sell at the prescribed highest price. In case the quantity of an intent order is not specified, it is deemed that the party who has placed such order is at least willing to execute a trade in the lowest quantity as required for a single block trade.

Once an intent order is accepted by members (including the situation where another member quotes a better price than the price of the intent order), the party who has placed the intent order shall place an execution order at least with one member who has accepted the intent order.

The execution price of a block trade of securities that are subject to a daily price limit shall be determined by the buyer and seller within the price limit applicable to such securities on the day of trading.
The execution price of a block trade of securities which are not subject to the daily price limit shall be negotiated by the buyer and seller within 30% of the previous closing price or between the highest and lowest traded prices on the day of trading.

After the buyer and the seller enter into an agreement on a block trade, they shall input execution orders into the Exchange trading system with identical execution price and trading volume.

Any execution order, once confirmed by the Exchange, shall not be modified or canceled and the buyer and the seller must accept the execution results as final.

The Exchange adopts the market maker system in block trades of bonds. A member recognized by the Exchange may serve as a market maker and provide bilateral bond quotation services through the Exchange block trading system.

Block trades are not included in the Exchange’s real-time quotations and index calculation. Upon the completion of block trades on each trading day, their trading volumes are added to the total turnover of relevant securities.

After the completion of block trades on each trading day, the Exchange will, in case of block trades of stocks or mutual funds, release the securities names, execution prices, trading volumes, and the names of brokerage branches involved, and in case of block trades of bonds or bond repos, release the securities names, execution prices and trading volumes, etc.

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