The Shanghai Stock Exchange (SSE) strengthened its supervision over speculation on newly issued stocks on the market by centralized risk alerts to a number of accounts prone to speculation on new stocks and taking measures including written warning and trading restriction towards some accounts seriously violating regulations.
Since the IPO re-launch in the 2nd half of the year, the SSE has made united deployment and careful arrangement to prevent potential over-speculation on new stocks: first, enhancing investor education by publicizing potential investment risks and regulatory risks in new stock speculation through news media; second, tightening up monitoring and punishment of suspicious abnormal trading behaviors and preventing possible over-speculation by means of oral reminder, written warning and trading restriction; third, working with its member units and urging them to play a better role in cooperative supervision to improve their client management.
According to an SSE official, most investors understand the potential risks in new share listing, with the climate of speculation on new shares on the decline on the market. Some investors, however, turned a blind eye to the reminders and warnings and plunged into speculation irrationally.
The SSE has recently imposed a trading restriction on an account with its owner surnamed Fang. It is learnt that the account participated in the speculation on some new shares and conducted abnormal trading behaviors like frequent orders and withdrawal of orders during the trading of several stocks this year. Despite a number of oral and written warnings from the SSE, Fang still conducted abnormal transactions frequently. As a result, the SSE imposed the disciplinary punishment of 3-month trading restriction on Fang's account. Meanwhile, the SSE stated that behaviors, made during new share trading, suspected of serious violations against laws and regulations will, depending on the situation, be reported to the China Securities Regulatory Commission for further investigation.
An SSE official also stressed that the bourse, adhering to its principle of strict supervision, would carry out a close surveillance over the trading of new shares on the first listing day and unswervingly cracked down on all illegal transactions. Meanwhile, all member units shall earnestly fulfill their management obligations on clients' trading behaviors by taking effective measures to standardize clients' trading behaviors with a view to preventing occurrence of illegal trading. For those with poor client management, their responsibilities would be investigated according to relevant rules.