After investors sell securities by short selling, they can repay the integrated securities directly or by buying and returning securities. Where an investor repays integrated securities directly, it shall be handled in accordance with the agreement between the investor and the securities company and the relevant provisions of the registration and settlement institution designated by the exchange. Where bonds are used to pay debts, investors entrust securities companies to buy securities through their credit securities accounts. At the time of settlement, the registration and settlement institutions directly transfer the securities bought by investors into the special securities account for securities lending of securities companies.
When an investor repays the integrated securities by buying coupons, the contents of the declaration for buying coupons shall include: ① the investor's credit securities account number; (2) the special seat code for margin financing and securities lending; ③ The code of the underlying securities; 4 the number of purchases; ⑤ Purchase price (except market price declaration); ⑤ "Securities Margin" logo; ⑤ Other contents required by the Exchange. It should be pointed out that before the settlement of related securities lending transactions, the funds obtained by investors from securities lending are not only used for the definition of buy one and securities lending transactions.
Margin trading means that investors pay a certain margin to the securities company as a guarantee for its debts.
Securities trading provides investors with a new way to make profits and a way to avoid risks. If investors expect the price of securities to fall soon, they can borrow securities and sell them, and then buy them at a lower price to make a profit; Or sell through short selling to hedge the price fluctuation of the securities already held, thus hedging.
However, investors should be soberly aware that securities lending, as a short-selling transaction, contains greater risks than buying transactions. If the securities lending transaction is only for the purpose of speculation, when the price of the securities sold may continue to rise, the losses of investors will be infinite. At the same time, securities lending transactions have leverage characteristics, which will further amplify risks.
Second, the characteristics of securities lending transactions
1, short the underlying securities
The types of securities that can be sold by short selling are called short selling securities. The Shanghai and Shenzhen Stock Exchanges determine the list of securities subject to securities lending according to the number of shareholders, circulating market value, turnover rate and fluctuation range. Securities companies can further select the securities subject to securities lending announced by the exchange, and make corresponding adjustments with the changes of the exchange list. The securities subject to short selling can be stocks, securities investment funds, bonds and other securities, and investors can only sell securities within this range.
2. Entrusted price of securities lending
Investors should understand the entrusted price rules of securities lending transactions before conducting securities lending transactions:
(1) Margin trading can only be entrusted by the price limit, not by the market price;
(2) The declared price of short selling of securities shall not be lower than the latest trading price of the securities. If the securities are not traded on the same day, the declared price shall not be lower than the previous closing price. If the declared price is lower than the above price when the investor entrusts to sell the securities, the entrustment is invalid.
3. Margin ratio
Margin ratio refers to the ratio of margin paid by investors when they sell securities, and the calculation formula is: margin ratio = margin/(number of securities sold × selling price) × 100%. The Shanghai and Shenzhen Stock Exchanges stipulate that the margin ratio of securities lending shall not be less than 50%.
4. Debt repayment of securities lending
Investors can repay the debt of securities lending by directly repaying bonds or buying bonds. Direct redemption means that investors use the same securities as their debt securities in their credit securities accounts to declare redemption. Buying and redeeming securities means that investors choose the transaction type of "buying and redeeming securities" through their credit securities accounts to buy securities.
Investors should pay attention to three points when purchasing and returning coupons:
(1) To buy bonds for resale, the frozen funds must be sold short. If the short selling funds are insufficient, the self-owned funds in the investor's credit account shall be used;
(2) The number of bonds purchased and returned must be an integer multiple of 100 shares;
(3) The part of the cash-back bonds bought by investors that exceeds the amount of securities lending liabilities is called residual bonds, which are deposited in the special securities account of securities companies for securities lending. Investors can apply to transfer the remaining bonds in the special securities account of a securities company to the investor's credit securities account.
Investors should also pay attention to:
(1) Short selling liabilities are calculated by market value and will fluctuate with the selling price of securities;
(2) Margin trading has the characteristics of leveraged trading, and the reasonable fluctuation of securities prices may lead to greater risks. I. Definition of financing transaction
Financing transaction refers to the trading behavior of investors paying a certain margin to securities companies and financing (borrowing) certain funds to buy stocks. The deposit submitted by investors to securities companies can be cash or securities that can be used to pay the deposit. In the future, after a securities company gives credit to investors, investors can purchase the securities in the list of financing objects published by stock exchanges and securities companies within the credit line. Securities and other capital security purchased by investors in their credit accounts are used as collateral for the overall debt of securities companies.
Financing transaction provides investors with a new way of trading. If the price of securities meets the expectations of investors, we can buy securities by integrating funds, and then sell securities at a higher price to repay the arrears, thus amplifying the income; If the price of securities does not meet the expectations of investors, the stock price will fall, and the loss will be amplified after the funds are invested in buying securities, and then the securities will be sold to return the arrears. Therefore, financing transaction is a kind of leveraged transaction, which can amplify the profit or loss of investors. Participating in margin trading requires investors to have strong securities research ability and risk tolerance.
Second, the characteristics of financing transactions
1. Securities to be financed
The types of securities that can be used for financing purchase are called financing target securities. The Detailed Rules for the Implementation of Pilot Margin Trading in Shanghai and Shenzhen Stock Exchanges stipulates that the underlying securities for financing can be stocks, securities investment funds, bonds and other securities listed on the exchanges. Shanghai Stock Exchange and Shenzhen Stock Exchange will determine the list of securities that need financing according to regulations. Securities companies can make further choices within the scope of margin financing and securities lending announced by the exchange, and make corresponding adjustments with the changes in the list of exchanges. Investors can only buy financing within this range.
2. Financing margin ratio
Margin ratio refers to the ratio of the margin paid by investors when they buy financing to the financing transaction amount, and the calculation formula is: margin ratio = margin/(number of securities bought by financing × purchase price) × 100%. The Shanghai and Shenzhen Stock Exchanges stipulate that the financing margin ratio shall not be less than 50%.
3. Repaying financing debt
Investors can repay financing liabilities by directly repaying or selling bonds. Direct repayment means that investors deposit funds into credit fund accounts and repay financing debts through the "direct repayment" instruction in the margin trading system.
4. Two risks that should be paid attention to in financing transactions
(1) During investors' financing transactions, if the benchmark interest rate for loans of financial institutions stipulated by the People's Bank of China is raised at the same time, the securities company will raise the financing interest rate accordingly, and the financing cost of investors will increase.
(2) During the financing transaction, the scope of the underlying securities is adjusted, and the listing of the underlying securities is suspended or terminated. Investors may be required by securities companies to close their financing transactions in advance, which may bring losses.
When buying in financing, we should also pay attention to: financing transactions have the characteristics of leveraged transactions, reasonable fluctuations in securities prices can amplify investors' profits and losses, and investors need to have strong risk control ability and tolerance. Step 1: Investors need to determine whether the securities companies and business departments that open accounts are qualified for margin financing and securities lending business.
Securities companies must be approved by the China Securities Regulatory Commission to carry out pilot financing and securities lending business; Without the approval of the China Securities Regulatory Commission, a securities company may not provide any convenience and services for the margin financing and securities lending activities between customers or between customers and others. Moreover, securities companies are also qualified to carry out margin financing and securities lending business for their subordinate business departments, and not all business departments can handle margin financing and securities lending business.
Step 2: Investors need to determine whether they meet the requirements of securities companies for margin customers.
Margin trading has certain requirements for investors' assets, professional level and investment ability. Due to the principle of appropriate management, securities companies will initially screen investors who apply to participate in margin trading.
Before opening an account for margin financing and securities lending business, investors need to evaluate and determine whether it meets the customer selection criteria for margin financing and securities lending of securities companies.
Step 3: Investors need to transmit credit information from the headquarters of securities companies.
Before margin financing and securities lending to customers, securities companies will conduct credit surveys on investors who apply for margin financing and securities lending business, so as to understand the identity, property and income status, securities investment experience and risk preference of customers, and keep records in written and electronic ways.
Securities companies will comprehensively determine the investor's credit limit according to the application materials, credit status, collateral value, performance and market conditions submitted by investors.
Step 4: Investors need to sign margin financing and securities lending contracts, risk disclosure documents and other documents with securities companies.
Before signing a margin trading contract with a securities company, investors should listen carefully to the explanations of the relevant personnel of the securities company on the business rules and contract contents, understand the business rules and risks of margin trading, and sign the margin trading contract and risk disclosure book for confirmation. Investors can only sign financing and securities lending contracts with securities companies to integrate funds and securities into them.
Investors should pay special attention to and understand the following contents of the margin financing and securities lending contract: (1) the calculation method of the amount, term, profit (fee) rate and interest (fee) of margin financing and securities lending; (2) Margin ratio, maintenance guarantee ratio, types and conversion rates of securities that can cover margin, and scope of secured creditor's rights. (3) The notification method and time limit for additional margin. (four) the way to pay off the debts of the investors and the right of the securities company to dispose of the collateral; (5) Handling rights and interests such as guaranteed securities and securities sold by short selling.
Step 5: Investors open credit securities accounts and credit fund accounts in the account opening business department.
(1) Opening a credit securities account
After an investor signs a margin trading contract with a securities company, the securities company will open a real-name registration system credit securities account for the investor in accordance with the provisions of the securities registration and settlement institution. Investor's credit securities account is the secondary account of the securities company's customer's credit transaction guarantee securities account, which is used to record the detailed data of the guarantee securities held by the securities company entrusted by investors. Investors can only have one credit securities account for trading securities listed on the stock exchange. The name of the account holder of the investor's credit securities account and its ordinary securities account shall be the same.
The credit securities account is independent of the ordinary securities account and is a newly opened securities account. Before margin trading, investors need to transfer the securities that can be used for margin guarantee from ordinary securities accounts to credit securities accounts. After the margin trading is completed, investors can transfer the secured securities back to the ordinary securities account. During the margin trading, with the consent of the securities company, investors can transfer more than 300% of the guaranteed securities back to the ordinary securities account.
(2) Opening a credit fund account
After signing the margin financing and securities lending contract with the securities company, investors need to sign the third-party depository agreement of customer credit funds with the securities company and commercial bank. A securities company shall, upon the application of an investor, notify a third-party depository bank to open a real-name registration system credit fund account for it. Investor's credit fund account is the secondary account of the customer's credit transaction margin account of a securities company, which is used to record the detailed data of the margin deposited by investors. Investors can only open one credit fund account.
After the above steps, the investor's account opening procedures in the securities company have been completed. When investors submit full collateral, they can start margin trading. Investor qualification
According to China Securities Regulatory Commission's Measures for the Administration of Pilot Margin Trading of Securities Companies (hereinafter referred to as the Measures), before investors participate in margin trading, securities companies should know the identity, property and income status, securities investment experience and risk preference of investors. For investors who do not meet the credit requirements of securities companies, have been engaged in securities trading in the company for less than half a year, the transaction settlement funds have not been included in the third-party depository, the securities investment experience is insufficient, the risk-taking ability is insufficient, or there is a record of major breach of contract, as well as the shareholders and related personnel of securities companies, securities companies may not raise funds or short bonds from them.
Securities company qualification
According to the Administrative Measures, only securities companies that have obtained the pilot license of margin financing and securities lending business of CSRC can carry out the pilot of margin financing and securities lending business. Without the approval of the China Securities Regulatory Commission, a securities company may not borrow or sell securities to customers.
Qualification of margin financing and securities lending in the United States
The United States has relatively loose regulations for securities companies to participate in margin financing and securities lending business. Securities companies that hold clients' securities are eligible to handle credit transactions as long as they meet the provisions on net capital in the Securities Exchange Law 1934. Securities companies that do not hold clients' securities can only accept clients' funds and securities in the name of securities companies that hold clients' accounts, so they are also called introducing securities companies.
In terms of customer qualification restrictions, the United States does not require investors who open credit accounts to have special qualifications, and the norms for customer qualifications are limited to capital and procedures. Among them, the level of funds is generally set by the exchange itself. Take new york Stock Exchange as an example. When opening a credit account, investors should keep the net value of the account above 2000 dollars.
Procedurally, there are three agreements to be signed. Signing a financing agreement: stating the interest rate of financing funds and the calculation method of financing period; Pledge agreement: stating that investors agree to use the securities they buy as the pledge target of financing; Agree to the lending agreement: agree to lend the securities in the account to the securities company for short selling. Margin trading declaration can be divided into two types: margin buying declaration and margin selling declaration. The contents of the financing purchase declaration shall include
① Investor's credit securities account number, ② Special seat code for margin financing and securities lending, ③ Target securities code, ④ Purchase quantity, ⑤ Purchase price (except market price declaration), ⑤ "financing" logo, and ⑤ other contents required by this Exchange; The contents of the securities lending and selling declaration shall include ① the investor's credit securities account number, ② the code of the special seat for securities lending and selling, ③ the code of the underlying securities, ④ the selling quantity, ⑤ the selling price (except the market price declaration), ⑤ the "securities lending" logo and ⑤ other contents required by this Exchange. Among them, the declared quantity of the above financing buying and selling is 100 shares (shares) or its integral multiple. In order to prevent the risk of market manipulation, the declared price of short selling securities by investors shall not be lower than the latest trading price of the securities; If there is no transaction on that day, the declared price of short selling shall not be lower than the previous closing price. If the declared price of short selling is lower than the above price, the trading host will consider it as invalid declaration and cancel it automatically.
If an investor sells the same securities held through a securities account owned or controlled by him during the period of securities lending, the price of the securities sold shall not be lower than the latest transaction price except for the part exceeding the amount of securities lending. The financing interest rate is calculated by multiplying the interest rate agreed in the margin financing and securities lending contract signed by the securities company and the investor by the actual financing amount and the number of days occupied. The financing interest shall be collected by the securities company from the investor's credit fund account or the way agreed in the contract when the investor repays the financing.
The calculation method of the cost of securities lending is to multiply the rate of securities lending varieties stipulated in the margin financing contract signed by the securities company and investors by the market value of securities lending and the number of days occupied on the day when securities lending occurs. The securities company will charge the securities lending fee from the investor's credit fund account or in the way agreed in the contract when the investor repays the securities lending.
According to the Measures for the Pilot Management of Margin Trading of Securities Companies, the financing interest rate shall not be lower than the benchmark interest rate for loans of financial institutions in the same period stipulated by the People's Bank of China.
It is worth noting that securities companies can also formulate different charging methods according to the actual situation, and the specific charging standards follow the agreement in the margin financing and securities lending contract. Before an investor borrows and sells securities from a securities company, he shall sign a contract for financing and selling securities and a risk disclosure statement for financing and selling securities with the securities company in accordance with the Administrative Measures and other relevant provisions, and entrust the securities company to open a credit securities account and a credit fund account for him.
According to the provisions of the Administrative Measures, investors can only choose one securities company to sign margin financing and securities lending contracts, and can only entrust one securities company to open credit securities accounts for them in a securities market.