Guidelines for Securities Trading and Investment: Preparation before Market Entry
Release time：
2023-06-30
Source：
1、Preparation before entering the market
Knowledge preparation before entering the market
Investors participating in securities trading should learn and master relevant basic knowledge,understand the characteristics and risks of the securities products they invest in as much as possible,objectively evaluate their own risk tolerance,fully understand the principle of"buyer responsibility",and prudently decide whether to participate in securities product trading.
Psychological preparation before entering the market
Psychological factors invisibly influence or dominate the behavior of investors.The difference between a mature investor and an immature investor often lies in whether they have established the correct investment philosophy,analyzed their own risk tolerance,and prepared themselves mentally to"enjoy the benefits and bear the risks".Investors should establish a correct investment awareness,overcome various negative attitudes,and become prepared investors.
Preparation of funds before entering the market
Investors should use their own funds for securities investment,and should have ample and no urgently needed funds.When investing,it is necessary to consider both the household's economic income and the actual consumption expenses,as well as unexpected needs.
2、Basic Concepts of Securities Trading
Securities trading:The activity of buying and selling issued securities on the securities market is called securities trading.Securities trading has three main characteristics:liquidity,profitability,and risk.
The principle of securities trading:Refers to the general rules reflecting securities trading,which should run through the entire process of securities trading.In order to ensure the full play of securities trading functions and facilitate the normal operation of securities trading,securities trading must follow the three principles of"openness,fairness,and impartiality".
Types of securities trading:According to the trading partners,securities trading can be divided into the following types:stock trading,bond trading,fund trading,and financial derivative trading.
The method of securities trading:Based on the relationship between the signing of trading contracts and actual delivery,the methods of securities trading include spot trading,forward trading,and futures trading.
Principal:A natural or legal person who can engage in securities trading in accordance with national laws and regulations.
Securities trading venues refer to venues that organize securities trading in accordance with the law,including stock exchanges(on exchange trading markets)and other securities trading venues(off exchange trading markets).Article 39 of the Securities Law stipulates:"Stocks,corporate bonds,and other securities publicly issued in accordance with the law shall be listed and traded on a lawfully established stock exchange or transferred on other securities trading venues approved by the State Council
The role of a stock exchange:
1.Provide convenient and sufficient trading conditions for various types of securities;
2.Provide open,fair,and sufficient price competition for various trading securities to discover reasonable trading prices;
3.Implement open,fair,and timely information disclosure;
4.Provide secure,convenient,and fast transactions and post transaction services.
Stock exchange:An organized market,also known as an"on exchange trading market",refers to a market formed by the centralized buying and selling of issued securities in a certain place,at a certain time,according to certain rules.Article 102 of the Securities Law stipulates:"A stock exchange is a legal person that provides places and facilities for centralized securities trading,organizes and supervises securities trading,and implements self-discipline management.Its establishment and dissolution shall be decided by the State Council."At present,there are two stock exchanges in China,namely,Shanghai Stock Exchange and Shenzhen Stock Exchange.
Other trading venues:Refers to securities trading markets outside of stock exchanges,also known as"over-the-counter trading markets".
China Securities Depository and Clearing Corporation Co.,Ltd.is a registration and clearing institution in China.Set up one branch in Shanghai and one branch in Shenzhen,of which the Shanghai Stock Exchange branch mainly provides investors with securities registration and settlement services for listed securities;The Shenzhen Stock Exchange Branch mainly provides investors with securities registration and settlement services for the listed securities of the Shenzhen Stock Exchange.
3、Entering the market
Account opening qualification
An investor applying for opening an account must hold a legal certificate certifying the identity of a Chinese citizen or a Chinese legal person,unless otherwise specified by the state(such as Qualified Foreign Institutional Investor(QFII)opening an A-share account,a foreign investor opening a B-share account,etc.).
According to the Securities Law and relevant regulations,the following natural persons are not allowed to open securities accounts:personnel of securities regulatory agencies;Management personnel of stock exchanges;Securities industry practitioners;The minor is not represented or allowed by the Legal guardian;Other personnel prohibited by laws and administrative regulations from participating in securities trading.
Account opening procedures
The documents provided when handling the account opening procedures must be true,valid,complete,and operated according to the following steps:
①Individual investors shall fill out the"Application Form for Registration of Natural Person Securities Account"at the securities company's business department with the original and photocopy of their ID card,pay the account opening fee,and open a Shanghai securities account card or a Shenzhen securities account card.If entrusted to others,a notarized authorization letter,the agent's ID card,and a copy must be provided.
②With the original and photocopy of your ID card,as well as the original and photocopy of your Shanghai and Shenzhen securities account cards,choose a securities company's business department to handle the securities trading agency procedures.Fill in and sign relevant documents such as the"Account Opening Application Form","Securities Trading Entrustment Agency Agreement","Designated Trading Agreement"(with designated trading requirements in the Shanghai Stock Exchange),and sign the agreement after reading and understanding the content of the"Risk Disclosure Statement".If there is an agent,they need to sign the"Power of Attorney"at the same time as the principal,and provide the original and photocopy of the agent's ID card.
③Choose a trading method,such as telephone commission,online trading,etc.
④The business department opens fund accounts for investors,and investors set fund passwords and transaction passwords.Two passwords have different functions,so it is advisable to set different passwords as much as possible,and strict attention should be paid to password confidentiality.At the same time,transaction cards should be issued to investors.
⑤Bring your ID card,bank deposit agreement,and bank savings card(if none are available,the bank can open them on the spot)to the relevant bank branch to handle the deposit procedures for securities transaction settlement funds,and open the bank securities transfer service for transferring securities transaction settlement funds between the bank savings card and the securities company's fund account.
Securities account card loss reporting
Once the securities account card is lost,you must immediately go to the business department of the securities company designated by the account for trading or securities custody,and apply to China Securities Depository and Clearing Corporation Corporation for handling the account loss reporting procedures through the business department.To report a loss,one must bring their own ID card.If the ID card is lost,they can present a proof of loss issued by the local police station with the customer's photo attached.
Securities inheritance and transfer procedures
Securities,as personal financial assets,can be inherited in accordance with the law.The parties involved may submit a written application to the local government notary office to complete the relevant procedures for inheritance notarization.Then,the inheritor shall handle the transfer procedures by holding a public certificate,ID card,securities account card of the inheritor and the deceased.
Activate dormant securities accounts
A dormant account refers to an account with a securities account balance of 0 and a capital account balance of no more than RMB 100,and no transactions for the past three consecutive years.Investors can bring their ID cards,securities account cards,and other documents to the securities business department to handle the activation procedures for dormant accounts.After activation,they can continue to use them.There is no charge for activating a securities account.
The above information is sourced from China Investor Network
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