Shenzhen Stock Exchange to launch block trading platform

Source: Shenzhen Stock Exchange

Members of the Shenzhen Stock Exchange (SZSE) and qualified investors will be allowed to handle block trading and agreement transactions of special assets management through the comprehensive agreement transactions platform, starting from January 12, 2009, the SZSE said today.

The move indicates that the long-brewed platform will be officially run very soon.

The platform, mainly serves institutional investors, is based on the integration of the original block trading platform.

The block trading modes of stocks, bonds, funds and special assets management of the SZSE will see far-reaching changes in the wake of the launch of the platform.

Principals from the SZSE introduced that investors of bonds are mainly institutional investors because of the slim profit margin. Due to problems such as discontinuous trading and overlarge bid-ask spread found in the centralized bidding system, agreement transactions are generally adopted in the fixed-income investment tools like bonds and special assets management.

Therefore, the SZSE has been preparing for the comprehensive agreement transactions platform since 2006, by re-defining and prioritizing the modules of stocks, bonds, funds and special assets management in the original block trading system.

The newly launched platform prioritized the trading functions in the original block trading system and offered diversified modes for agreement transactions. Meanwhile, the platform supported the major dealer system to provide more liquidity for investors and enhance the functions of market pricing and price discovery of the bonds market. In addition, the platform expanded the broadcast channels of the agreement transactions quotes, which will be disclosed in the website and quotes disclosure software.

It is noted that treasury bonds, enterprises bonds, corporate bonds, detachable convertible bonds and special assets management will initiate trading through the platform.

To attract more investors, the SZSE will exempt investors from commission for bonds trading (regulation fee not included) within one year from the day the platform is officially launched.

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