Questions about securities custody: What is securities custody?

1. Custody system of securities traded in Shanghai Stock Exchange. The current securities custody system of Shanghai Stock Exchange is related to designated transactions. Once the investors who hold and trade the securities listed on the Shanghai Stock Exchange confirm the designated transaction, their custody relationship with the securities operating institutions designated for the transaction will be established. The securities of investors who have not handled the designated transactions shall be temporarily held by China Clearing Shanghai Branch, and their dividends, bonuses, debt interest and bond redemption shall be collected after handling the designated transactions. Investors must handle the designated transactions of securities accounts in the securities business department before buying, selling or inquiring about securities. Investors who change the securities business department to buy and sell securities must apply for canceling the designated transaction in the original securities business department, and then go through the designated transaction procedures in the transferred securities business department. Designated trading refers to the institution designated by investors as the only trading point for buying and selling securities after signing an agreement with the securities business department. From 1 April, 19981day, Shanghai Stock Exchange began to implement the designated trading system in an all-round way. According to the relevant regulations of Shanghai Stock Exchange, designated trading refers to the system that all investors who conduct securities trading in the Shanghai Stock Exchange market must appoint a trading participant as the sole trustee of their securities trading in the Shanghai Stock Exchange market in advance, and the trading participant participates in the securities trading in the Shanghai Stock Exchange market through his specific participant business marketing unit. An investor shall sign a designated trading agreement with a designated trading member to clarify the rights, obligations and responsibilities of both parties. After the designated trading agreement is signed, the trading participants can apply to the trading host of Shanghai Stock Exchange for designated trading procedures according to the application of investors. After the implementation of this system, if the investor fails to handle the designated transaction, the trading system of Shanghai Stock Exchange will automatically reject the trading declaration instruction of his securities account until the investor completes the designated trading procedures. The registration procedures and confirmation procedures for investors to handle designated transactions are as follows: (1) The investor applies to a securities company that has become a participant in the Shanghai Stock Exchange, and after the securities company agrees, both parties sign a designated transaction agreement; (2) The securities company declares the designated trading instruction of the securities account to the computer host of the Shanghai Stock Exchange according to the agreement: (3) The computer host of the stock exchange accepts the declaration and sends the designated trading confirmation receipt with the confirmation number after the market closes on the same day. The designated transaction of the securities account will take effect on the next business day. Investors who have selected designated transactions have the right to change the designated transactions as needed. A securities company shall not delay or refuse for any reason, unless the investor fails to perform the transaction settlement responsibility and other breach of contract. 2. Securities custody system of Shenzhen Stock Exchange. Investors who intend to hold and trade securities listed on the Shenzhen Stock Exchange will establish custody relationship with the selected securities operating institution after successfully buying the securities. If the issued shares are subscribed by other means, the shares will be entrusted to the securities institutions designated by the investors. This system can be summarized as: automatic custody, generally buying everywhere, where to buy and sell, without restrictions on transfer. The securities held by Shenzhen investors need to be managed in their own securities business department, which manages the detailed securities information under their names, and the securities custody of investors is automatic; Investors buy securities in any securities business department, and these securities are automatically hosted in the securities business department; Investors can use the same securities account to buy people's securities at any securities business department in China; Investors who want to sell securities must go to the securities custody business department (where the buyer sells); Investors can also transfer their securities under custody from one securities business department to another, which is called "securities transfer custody". Re-custody can be one or more securities, or some or all securities. The specific process for investors to transfer securities into custody is as follows: (1) After determining the seat code and address of the securities business department, investors bring their ID card, the original and photocopy of the securities account and apply to the transferred securities business department. (2) When accepting an application from an investor, the transferred securities business department shall check the ID card, securities account and seat code of the investor transferred to the securities business department. After verification, stamp the application form filled by the investor for confirmation and send the customer to the investor. (3) The transfer-out securities business department shall, in accordance with the relevant regulations of Shenzhen Stock Exchange, declare the transfer custody within the trading time. Transfer custody can cancel the order. Between different seats of the same securities company, the securities bought on the same day can be transferred to custody; Between the seats of different securities companies, the buyer's securities on that day cannot be transferred to custody. (4) After the market closes in the afternoon of each trading day, the securities business department receives the confirmed and unconfirmed re-custody data returned by China Clearing Shenzhen Branch, and adjusts the corresponding securities detailed data accordingly. (5) After receiving unconfirmed data of re-custody, the business department of the transferred-out securities can inquire about the reasons for the failure of re-custody from China Clearing Shenzhen Branch. (6) The corresponding securities custody shall be transferred to the securities business department from the next trading day after the confirmation of the transfer custody data. In addition, the transfer of securities to custody also refers to the transfer of securities entrusted by a registration and settlement company to other seats (A shares, funds, convertible bonds, government bonds, warrants, etc.) according to the application of securities companies. Registered by China Clearing Shenzhen Branch). China Clearing Shenzhen Branch only accepts applications from securities companies for re-custody. Investors should apply to the securities business department of the place where their securities are entrusted for re-custody, and the securities that have not been suspended shall not be re-custody. The bulk transfer custody of securities of securities companies refers to the bulk transfer custody of securities due to business needs, that is, the bulk transfer custody of securities under one seat to another seat or several seats, or the bulk transfer custody of securities under several seats to another seat. There are two ways of bulk transfer custody and bulk offer transfer custody. Securities companies can choose one of them according to their own situation. Overall custody applies to all securities custody from one seat to another. The transferred seats shall meet the conditions for opening Shenzhen Stock Exchange, and relevant opening procedures have been handled. Between different seats of the same securities company, the securities bought on the same day can be transferred to custody; Between the seats of different securities companies, the securities of the buyer on the same day generally cannot be transferred to custody. However, if it is necessary to transfer the buyer's securities into custody due to the closure, suspension, merger or transfer of seats, an application for transferring the El buyer's securities into custody can be submitted to China Clearing Shenzhen Branch, and it can only be transferred into custody after it is verified that there is no default risk in settlement. Batch custody is suitable for transferring part of the securities held by one seat to another seat. The transferred seats shall meet the conditions for opening Shenzhen Stock Exchange, and relevant opening procedures have been handled. For different seats of the same securities company, the buyer's securities can be transferred to custody on the same day; Between the seats of different securities companies, the buyer's securities on that day cannot be transferred to custody.