● The construction of the legal framework of warrants aims at solving the problem of how to stipulate the specific system of warrants in the legal norms of different levels of effectiveness, that is, how to divide, coordinate and connect the warrant system in laws, regulations, administrative rules and exchange business rules.
● The provisions of China's Securities Law and Company Law on the audit mode of warrant issuance and listing should be universal, taking into account the unique laws and characteristics of warrant issuance and listing audit. On the basis of distinguishing between corporate warrants and covered warrants, different supervision modes are implemented for warrant issuance and listing audit.
When issuing covered warrants, the mode of "issuer qualification management" should be adopted, and the exchange will set corresponding conditions in its business rules. Those who meet the requirements and obtain qualifications may issue warrants at any time and apply to the exchange for listing according to market conditions and their own needs. In the design of specific conditions, we should pay special attention to the issuer's debt performance ability when the warrant holder exercises his rights.
● At the initial stage of the introduction of warrants in China, we should first consider choosing a large-scale and highly mobile company as a pilot to prevent the risk of warrant price manipulation.
● The risk of warrant trading mainly includes two parts: one is the universal risk under the existing securities market environment and trading mechanism; Second, the unique risks determined by the characteristics of warrant products can be designed from five aspects: implementing the management of warrant trading rights; Fully reveal the trading risks to investors; Establish a transaction price restraint and disclosure mechanism; Introduce the mechanism of warrant creation; Strengthen real-time monitoring of warrant transactions.
China warrants product innovation has begun, and its innovation process is also the process of legal innovation and system construction. This report takes covered warrants as the research object, taking into account corporate warrants, and based on the overseas warrants legal system, especially in Taiwan Province, China, studies the relevant legal framework and system design for developing warrants products in Chinese mainland.
Warrant is a relatively mature securities derivative, and overseas markets have many successful experiences in the development of warrant products. In the construction of China's warrant product system, we can get twice the result with half the effort by learning from the basic experience and effective practices of overseas warrant markets. Choosing a suitable sample is the conventional path for the legal system to learn from. Through the comparative analysis of the legal system of the warrants market in some regions, we think that compared with other markets, the securities markets in Chinese mainland and Taiwan Province are similar in terms of development degree, supervision mode, legal thinking and legal culture, and the legal system of warrants in Taiwan Province has borrowed and grafted the mature experience of overseas warrants markets, which has well realized the organic combination of legal localization and internationalization, and is worth learning. Therefore, on the basis of a brief review of foreign legal system of warrants, this part focuses on the analysis of the legal system of warrants in Taiwan Province.
(1) A Brief Comment on the Legal System of Overseas Warrants
In Hong Kong, Singapore, Germany and other regions where the warrant market is relatively developed, the warrant legal system is embedded in the local securities legal structure and market environment, which has its own characteristics, but overall its particularity is limited. In more cases, the path of building a warrant legal system in different regions presents many * * * characteristics, which can be summarized as follows:
1. Construct the legal system of warrants within the framework of the securities system. When overseas countries or regions introduce warrants, the premise of their system construction is to include warrants in the broad definition of "marketable securities". For example, in the United States, warrants are explicitly included in the scope of "securities" in the Securities Law, or in Japan, new securities such as warrants are recognized by administrative organs through "authorization clauses" as needed. In the specific system, it is basically based on a series of supporting measures such as issuance, listing, trading and supervision of its existing securities market, taking into account the particularity of warrants, and adjusting, supplementing and updating the system. Moreover, the original supervision methods used in the securities market are also applicable to the warrant market. In the warrant market, issuers also need supervision, including information supervision, liquidity supervision and transparency supervision. Only in view of the characteristics of the warrant market, the focus and tendency of supervision need to be redefined.
2. The legal systems of corporate warrants and covered warrants are different. Company warrants are related to the company's securities issuance and fund raising, and have certain dependence. Generally speaking, the supporting legal norms are mainly company law, supplemented by administrative regulations and market business rules. Covered warrants, as a relatively independent securities derivative, occupy a dominant position in the overseas warrant market. In the supporting legal norms, the company law does not directly adjust the covered warrants. The Securities Exchange Law can directly stipulate the legal status of covered warrants or give them legal space through "authorization clauses". However, the specific system mainly stipulates that in administrative regulations, especially in the business rules of stock exchanges, most of the system contents involve issuer qualification management, warrant listing conditions, warrant product risk control and so on.
3. In the supply of warrant system, it is particularly important to define the responsibility boundary between self-discipline supervision and administrative supervision. As mentioned above, when constructing the specific system of warrants, on the one hand, we should skillfully and flexibly use a series of supporting measures such as issuance, listing, trading and supervision of the existing securities market, and at the same time, we should take into account the particularity of warrants and make institutional adjustments and innovations. System adjustment and innovation are mostly completed by securities regulatory agencies and exchanges. Among them, the innovative development of warrant products needs to clarify the responsibilities of self-discipline supervision and administrative supervision, and give the exchange the autonomy it deserves. Taking covered warrants as an example, as the mainstream product in the warrant market, the relevant principles and framework system are provided by the administrative regulatory agencies, but the specific system provisions such as issuer qualification and warrant listing are clearly stipulated by the business rules of the exchange, and the securities regulatory agencies have the right to supervise and ultimately veto the self-regulatory supervision of the exchange. The qualification of warrant issuer and the audit of warrant listing also belong to the self-regulatory authority of the stock exchange.
(II) Analysis of the supporting legal system of warrants in Taiwan Province.
Since 1997, two securities companies in Taiwan Province Province, Dahua and Bora, issued the call covered warrants for the first time, the covered warrants market in Taiwan Province Province has developed rapidly, and gained significant advantages over corporate warrants, becoming the leading product in the warrant market. Strictly speaking, the company warrants that can exist as independent securities are limited to the rights certificates of subscribing for new shares.
1, institutional framework of corporate warrants
(1) legal level, involving company law and securities exchange law. The company's warrants are related to the company's financing activities, which are first adjusted by the company law of Taiwan Province Province. 167 stipulates that the company can deliver stock option certificates to employees in order to implement stock option incentives. Article 248, Article 262 and Article 268 respectively stipulate the options attached to the issuance of corporate bonds and stocks by the company; Certificate of subscription right for new shares issued when issuing new shares. It is not difficult to find that in Taiwan Province Province, there are two kinds of corporate warrants, one is to encourage employees' equity, and the other is to combine with corporate financing to enhance the attractiveness of financing plans to investors. However, it should be noted that the stock options attached to stocks and corporate bonds stipulated in the Company Law of Taiwan Province Province are completely attached to stocks and corporate bonds; Although stock option certificates issued to employees exist independently, they cannot be transferred. In view of this, the second paragraph of Article 6 of the Securities Exchange Law of Taiwan Province Province only regards the "new share subscription right certificate" as a securities that can be listed and traded separately. Employee stock subscription certificates and stock options attached to the issuance of corporate bonds or stocks are not independent securities and cannot be listed and transferred separately.
(2) At the level of administrative regulations, it involves the Guidelines on the Handling of Offering and Issuance of Securities by Issuers. The "Regulations" have special provisions on the internal decision-making procedures, conditions, requirements and contents of public documents of issuers for issuing stocks, corporate bonds and employee stock options. The issuance documents of stocks and corporate bonds must reveal the conditions, procedures, prices and performance methods of issuing stocks. In addition, Articles 14 and 4 1 of the Regulations specifically stipulate that when an issuer issues stocks and corporate bonds with warrants, the warrants shall not be separated from the stocks and corporate bonds.
(3) At the level of trading rules, it mainly involves the listing review criteria of Taiwan Stock Exchange Co., Ltd., the business rules of Taiwan Stock Exchange Co., Ltd., and the securities secured trading measures of Taiwan Stock Exchange Co., Ltd. Among them, article 2 1 of the listing review standard stipulates that the subscription certificate of new shares can apply to the exchange for listing, but the warrants in the stocks with warrants cannot be listed independently. Article 73 of the Business Rules stipulates that the relevant provisions of listed stocks shall apply to the issuance of new share warrants. According to the particularity of warrants and corporate bonds, the Measures for Securities Trading with Warrants has made special provisions on their trading.
2. Institutional framework of covered warrants.
(1) On the legal level, the listing of securities in Article 6 of the Securities Exchange Law does not include covered warrants, but the provision of "other securities approved by the Ministry of Finance" in the first paragraph of this article belongs to the authorization rule, allowing the Ministry of Finance of Taiwan Province Province to identify other types of securities according to market needs, so as to coordinate the contradiction between legislative stability and the volatility of the securities market. 1997 The introduction of covered warrants in Taiwan Province Province was approved in advance by the Finance Department of Taiwan Province Province. As the issue of covered warrants has nothing to do with the company's stock issuance and fund raising, there is no corresponding provision in the Company Law of Taiwan Province Province.
(2) At the administrative regulations level, it involves the guidelines for issuers to apply for issuing call (put) warrants. This standard clarifies that the issuer of call (put) warrants is a securities company engaged in securities underwriting, self-supporting and brokerage business in addition to the issuer of the underlying securities. Therefore, only the covered warrants are supervised, and the issuer can only be a comprehensive brokerage; The underlying securities covered by warrants are mainly stocks, and the fund is limited to tracking ETFs of Taiwan Province 50 Index. The specific situation of the underlying securities shall be stipulated by the exchange itself; Covered warrants issuers implement qualification management. When issuing covered warrants, the issuer shall apply to Taiwan Province Securities and Futures Management Committee for issuance qualification. In terms of operational procedures, an application is submitted to the exchange, which issues an audit opinion and reports it to the CSRC for confirmation.
(3) As for the business rules of the exchange, it involves the listing review criteria of call (put) warrants and the trading methods of call (put) warrants, and stipulates the market operation rules of covered warrants from two different aspects: listing and trading.
First of all, to apply to the exchange for the qualification of the issuer of covered warrants, the following conditions should be met: a. The issuer's shareholders' equity has recently reached NT$ 3 billion after being examined by an accountant; B. The accounting report of the previous year has no accumulated losses after being audited; C. The capital adequacy ratio reaches 200% in the first half of the issuance; D. put forward feasible risk write-off strategies; 5. Rating by a credit rating agency recognized by the competent authority. If the conditions mentioned in items A and B are not met, an irrevocable guarantee will be provided by a qualified institution.
Secondly, the issuance procedure of warrants is stipulated. After obtaining the qualification for issuing covered warrants, the issuer shall apply for listing the issued warrants in this Exchange, submit the issuance plan, and issue the public sales instructions after being approved by this Exchange. It should be pointed out that even if the issuer is qualified to issue covered warrants, the Exchange still has the right to refuse or restrict its application for public sale of covered warrants according to the applicant's financial status, the underlying securities status and the total amount of covered warrants based on the same or similar underlying securities that have been listed and traded.
Thirdly, the listing conditions of warrants are stipulated. The listing conditions include the conditions of the underlying securities, the number of all warrants based on the same underlying securities, the number and dispersion of individual warrants, and the specific contents and requirements are basically the same as those of Hong Kong and Singapore.