In China the stock exchange is now in general a non-profit-making legal entity with membership system. It is market which provides places for organized trading in securities, manages spot trading of listed stocks and bonds, supplies the customers with the services of securities clearing, delivery, transfer and storage, and with the market information. The Exchange deals with other business activities or services permitted or entrusted by the People’s Bank of China.
The securities listed in exchange include government bonds, corporation bonds, financial bonds and stocks publicly issued all over the country.
If you want to buy or sell securities in the market, you must entrust member company’s broker to make the dealing, register for the roll and open a capital account and a securities account. Entrustment may include personal interview, contracts by telephone, telegraph, telex and letters. Entrustment price is divided into market price and limited price. The term of entrustment is divided into one-day and five-day validity.
In securities trading, only spot trading is allowed. The transaction includes the trading of one day, regular day and appointed day. The trading amount must be a set or its multiple. Brokers are organized to trade in stocks and bonds according to the principle of time priority and price priority. The delivery, settlement and ownership-transfer of the securities are carried out through the settlement department.