SSE Releases Guidelines on the Stock-Pledge Repo Transactions

On August 27, 2021, Shanghai Stock Exchange drafted and released the No.1 Guidelines on the Stock-Pledge Repo Transactions - Risk Management, to be implemented from January 1, 2022. The guidelines are applicable to stock-pledge repo transactions conducted by securities companies. A securities company carries out stock-pledge repo transactions shall take serving the real economy as the main goal, preventing business risks and standardizing business operation. At the same time, it shall implement centralized and unified management of stock-pledge repo transactions, and establish a sound management system, operation process and risk identification, evaluation and control system to ensure that risks are measurable, controllable and bearable. The guidelines also stipulate the management of both parties in the stock pledge repo transactions, the use and source of capital, business continuity management, and internal control at securities companies.