The China Securities Depositary and Clearing Corporation Limited ("CSDC") has recently issued the Implementing Rules on Settlement Business for the Stock Option Pilot Program on the Shanghai Stock Exchange (Revised Draft for Comment in 2019) (the "Draft for Comment") for public comment by November 27, 2019.
The Draft for Comment proposes changes to the level of this document's effectiveness, the connection with the business guides, forced close-out, self-regulatory measures, wording of articles in relation to fee charges, etc. Among others, the Draft for Comment adjusts the level of the previous rules' effectiveness to be "implementing rules", removes the provisions of the previous Article 12 regarding the documents that a settlement participant is required to submit when it applies for opening a margin account; and replaces the previous detailed descriptions of fees for registration and clearing business for options on the Shanghai Stock Exchange ("SSE") with the descriptions in principle. Furthermore, the Draft for Comment emphasizes that for SSE stock options, the CSDC will temporarily not charge the settlement fees for covered put, adding that it may resume charging such settlement fees, according to the developments in the stock option pilot program on the SSE.